TLDR
- President Trump's decision to build a Bitcoin-centric reserve sidelined major players like XRP, DOGE, and ADA, leading to price falls of up to 9%.
- More than $400 million worth of long positions in crypto futures got liquidated, mostly stemming from Bitcoin-related products.
- Despite being the focal point of Trump's strategy, Bitcoin's value slipped from $93,000 to just below $88,000.
- Investor expectations dimmed following an underwhelming reveal of the Bitcoin reserve strategy.
- Anticipation remains tepid ahead of the White House Crypto Summit today, as traders brace for news that may not significantly sway the markets.
In the past 24 hours, key cryptocurrencies like XRP, Dogecoin, and Cardano saw a precipitous drop of 9% after President Trump announced a Bitcoin-focused Strategic Reserve, excluding these popular coins.
Late last Thursday, Trump instructed the creation of a reserve comprised solely of government-seized Bitcoin, with other digital assets to be collected as incidental seizures.
The recent announcement threw cold water on what had been a bullish sentiment in the crypto community, a sentiment bolstered by earlier hints that tokens such as XRP, ADA, Ethereum, and Solana might be included.
Traders were holding out hope for a government intervention that might lift prices across various cryptocurrencies. However, the exclusive focus on Bitcoin sent alternative currencies on a downward trajectory.
Earlier in the week, Dogecoin experienced a 12% uptick in value. This surge was driven by NYSE Arca's application for the approval of a DOGE exchange-traded fund via Bitwise.
Speculation had built around Dogecoin possibly being part of the national reserve, but Trump's Bitcoin-centric stance quashed those aspirations.
Even Bitcoin couldn't escape the broader market slide, with its value falling 4.5% from a high of over $93,000 down to below $88,000, despite being Trump's centerpiece.
Market Impact and Liquidations
The CoinDesk 20 index, which reflects the performance of the largest crypto tokens, declined by 5%, with smaller altcoins suffering losses up to 10%.
The price drop culminated in over $400 million worth of liquidations in optimistic crypto futures positions, with the lion's share, $230 million, originating from Bitcoin-linked bets.
Hopeful eyes turn to the White House Crypto Summit slated for March 7, attracting key figures from industry and government to deliberate on the crypto landscape.
Though the summit draws significant attention, expectations remain tempered. LVRG Research's Nick Ruck expressed skepticism, suggesting the strategic reserve announcement underwhelmed.
Ruck commented on Trump's absence of major promises for the summit, maintaining a cautious market mood, with traders staying wary.
Nevertheless, there's an air of anticipation for unexpected developments, especially with notable blockchain figures and officials present.
The summit's agenda includes tackling both the potential and hurdles of cryptocurrency adoption, encompassing the strategic reserve setup and regulatory measures.
Brian Armstrong, Coinbase's CEO, voiced confidence in the regulatory approach, arguing that clearer guidelines could spark innovation and acceptance in the crypto sector.
Hunter Horsley, Bitwise's CEO, offered a more restrained perspective, noting the complexities in adding altcoins to a national reserve and advocating for a cautious path.
The summit signifies the U.S. government's endeavor to lead in the digital currency arena, aiming for a balance between fostering tech progress and ensuring regulatory vigilance.
