Market uncertainty and lack of regulatory clarity trigger massive sell-offs in Trump-backed cryptocurrencies.
Trump’s Crypto Reserve Announcement
U.S. President Donald Trump announced plans for a “crypto strategic reserve” to position the U.S. as a global leader in digital assets. The reserve includes Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA). Following the announcement, these cryptocurrencies initially surged in value. However, investor skepticism quickly set in as questions arose regarding funding, execution, and the government’s role in cryptocurrency markets.
$TRUMP Coin Crashes from Peak
Trump’s own meme coin, $TRUMP, launched in January with a market cap of $15 billion at its peak. Investors speculated that Trump’s pro-crypto stance would institutionalize digital assets. However, in just over a month, $TRUMP has lost 80% of its value, dropping to $2.48 billion. Analysts attribute the decline to lack of follow-through on pro-crypto policies and broader market downturns.
Investor Confidence Wanes
Financial analysts believe that crypto’s latest slump reflects broader economic concerns. Trade tensions and Trump’s tariff policies have led to risk aversion among investors. Additionally, the recent $1.5 billion Bybit hack—the largest crypto heist to date—has shaken trust in digital assets. Susannah Streeter, head of money and markets at Hargreaves Lansdown, stated:
“Without firm regulatory moves from Trump to support the sector, nervousness looks set to continue.”
Crypto Market’s Reaction
Bitcoin has dropped 20% since Trump’s inauguration, while Ethereum hit a 16-month low. Investors initially reacted positively to Trump’s reserve announcement, but the rally was short-lived. Analysts warn that unless clear regulations emerge, volatility in crypto markets will persist.
Legal Loophole: Is $TRUMP an ‘Artwork’?
A clause on $TRUMP’s official website describes the coin as an “artwork” rather than an investment, potentially shielding it from financial regulations. Digital art advisor Georg Bak commented:
“Labeling a meme coin as art can provide legal protections, avoiding regulatory scrutiny that applies to financial securities.”
Uncertain Future for Crypto in the U.S.
The crypto industry remains divided on Trump’s policies. Some investors support the reserve initiative, while others believe government involvement contradicts crypto’s decentralized nature. With the first White House Crypto Summit approaching, market participants await further clarity on the administration’s stance.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
