Trump’s Crypto Reserve and Trade Tariff Announcements Spark Market Turmoil

Bitcoin Plunges as Trump’s Crypto Plan Faces Scrutiny

A weekend rally fueled by Donald Trump’s surprise announcement of a U.S. Crypto Strategic Reserve quickly unraveled on Monday, sending major cryptocurrencies into a tailspin. Initial enthusiasm drove XRP, Solana (SOL), and Cardano (ADA) sharply higher after Trump named them as part of the planned reserve. The rally extended further when Bitcoin (BTC) and Ethereum (ETH) were later added. However, the surge collapsed just as fast, with prices erasing most of their gains, sparking accusations of market manipulation.

Peter Schiff, an outspoken economist and longtime Bitcoin critic, wasted no time in branding Trump’s move as a “crypto pump and dump.” Schiff demanded a Congressional investigation, arguing that insiders had prior knowledge of the announcement and exploited it for profit while retail investors bore the losses.

He pointed to a post from Eric Trump celebrating the timing of the announcement—made on a Sunday when Wall Street was closed—as a deliberate tactic to manipulate the market. “Donald Trump, the first crypto President, just helped pull off the biggest crypto rug pull of all time,” Schiff wrote, intensifying the controversy. 

Critics also challenged the inclusion of altcoins in the reserve, arguing that Bitcoin alone should serve as the foundation of any government-backed crypto holdings. Despite the backlash, speculation is growing that additional assets such as Chainlink (LINK), Ondo (ONDO), and Litecoin (LTC) could be added to the reserve.

The broader economic landscape added further pressure to the crypto market as escalating trade tensions between the U.S., China, and Canada rattled investor confidence. On March 4, Canada announced 25% tariffs on $20.8 billion worth of U.S. imports in direct retaliation against American trade measures. Prime Minister Justin Trudeau hinted at further economic countermeasures but did not disclose which additional sectors might be targeted. 

Meanwhile, China took a different approach, blacklisting 25 U.S. firms and restricting their ability to export and invest within its borders, citing national security concerns. The Chinese government also imposed new tariffs ranging from 10-15% on American agricultural and food products while singling out U.S. defense contractors involved in arms sales to Taiwan rather than household consumer brands. These actions came in response to Washington’s decision to increase tariffs by 10% on Chinese goods, pushing total levies on certain exports to 20%.

Market reaction was swift, with Bitcoin and Ethereum leading a broad crypto sell-off. The total cryptocurrency market capitalization plunged by 12%, as investors sought safety in traditional assets. Bitcoin tumbled below $82,000 after losing $10,000 in just 24 hours, marking its sharpest daily drop of the year before recovering. The price decline reflected a combination of factors, including waning enthusiasm over Trump’s crypto reserve, concerns over worsening trade disputes, and a broader flight from riskier investments. 

The Kobeissi Letter, a prominent trading research firm, described the situation as a shift in market perception. “As trade war tensions rise and economic policy uncertainty broadens, ALL risky assets are falling. Bitcoin is now viewed as a risky asset, not a safe-haven play.”

Gold, often seen as a refuge during times of economic instability, continued its upward trend, consolidating near all-time highs. Year-to-date, gold has gained 10%, while Bitcoin has slipped 10%, reinforcing a reversal in investor sentiment. 

On the technical side, Bitcoin is now approaching its 200-day simple moving average (SMA), a historically significant support level for bull markets. Additionally, the largest CME gap in Bitcoin futures history, at $85,000, has now been filled, raising the possibility of continued volatility in the days ahead.

Attention now shifts to upcoming market events that could dictate the next move in crypto prices. On March 7, the White House Crypto Summit is expected to reveal further details about the U.S. Strategic Crypto Reserve, with investors closely monitoring whether Trump’s administration will expand or clarify the initiative’s structure. 

Meanwhile, geopolitical tensions remain a looming threat. Trump has already suggested additional tariffs on China and Canada if trade partners refuse to comply with U.S. demands, potentially triggering another wave of market instability. 

Bitcoin’s next key test will be whether it can hold support between $78,000 and $80,000. If prices break below this range, analysts warn of a deeper correction ahead. A rebound above $85,000, however, could restore bullish momentum and reignite optimism in the market.

This article has been refined and enhanced by ChatGPT.