Crypto stocks experienced significant volatility on Monday following President Donald Trump’s announcement about the creation of a U.S. crypto reserve. The plan, which was revealed through a post on Truth Social, includes major digital assets such as Bitcoin, Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).
Trump’s statement came after an executive order was issued to create a national crypto “stockpile,” but without specifying which cryptocurrencies would be included. The announcement initially triggered a strong rally, but the momentum reversed as the day progressed.
Stocks See Gains and Losses
Shares of Strategy (MSTR), the largest corporate holder of Bitcoin, initially jumped by 12% on Monday but ended the day down by 1.8%. Meanwhile, cryptocurrency mining stocks Riot Platforms (RIOT) and MARA Holdings (MARA) saw gains of 7% and 9%, respectively, before also reversing direction. By the close of trading, Riot fell 4.5% and MARA dropped by 1%. Meanwhile, crypto exchange Coinbase (COIN) saw a 4.6% decline.
In his post, Trump emphasized that the U.S. crypto reserve would “elevate this critical industry” and included multiple digital assets like XRP, SOL, and ADA. He reiterated his commitment to making the U.S. “the Crypto Capital of the World.”
Bitcoin’s Rollercoaster Ride
Bitcoin (BTC) initially surged nearly 9%, reaching over $92,000, but reversed course to close down more than 8%. This decline came after Bitcoin experienced its worst month since June 2022, losing about 17% in February. Trump’s announcement briefly sparked a $300 billion global crypto rally on Sunday, but that momentum stalled by Monday evening.
Surprising Inclusion of Other Digital Assets
Bernstein analysts noted that Trump’s announcement of a “Crypto Strategic Reserve” extended beyond Bitcoin, which caught the crypto community by surprise. “What was expected to be a ‘Bitcoin national stockpile’ has turned out to be a reserve covering multiple digital assets,” the analysts stated in a note on Monday morning.
The idea of a national crypto reserve was first proposed by U.S. Senator Cynthia Lummis, who introduced a bill in 2024 calling for the U.S. Treasury to establish a strategic Bitcoin reserve. However, there are questions about whether Trump’s executive order can bypass Congress or the Federal Reserve (Fed) balance sheet to create the reserve.
Legal and Regulatory Implications
Experts have noted that creating a strategic crypto reserve would require significant collaboration with the Fed, which would likely need to be involved if the U.S. Treasury is to manage the reserve. Legal experts from Duane Morris indicated that Trump’s proposal would require cooperation between various government agencies, particularly the Fed, to be successfully implemented.
Trump’s stance on cryptocurrencies contrasts with that of former President Joe Biden’s administration, which has seen stricter regulatory measures, particularly through the Securities and Exchange Commission (SEC) led by Gary Gensler. Under Trump’s direction, the regulatory environment for crypto has become more relaxed, with the SEC recently halting investigations into major crypto companies like Coinbase and Robinhood.
Crypto Market Movement
After the initial surge in response to Trump’s announcement, the broader cryptocurrency market experienced significant declines. Ethereum (ETH) fell nearly 15%, Solana (SOL) dropped 18%, and XRP saw a dramatic reversal after gaining nearly 18%, ending the day down 16%. Cardano (ADA) also saw a sharp decline after rallying nearly 50%.
The crypto market remains highly volatile, and investors are closely watching further developments regarding the U.S. crypto reserve and potential regulatory changes.
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