Bitcoin Slumps as Trump’s Crypto Reserve Hype Fades Amid Tariff Concerns

Bitcoin extended losses on Tuesday, reversing gains from U.S. President Donald Trump’s crypto reserve announcement. The world’s largest cryptocurrency dropped 10.1% to $83,950 by 00:04 ET, nearing a four-month low. Major altcoins also plunged as investor enthusiasm waned.

Trump’s Monday remarks about including Bitcoin, Ether, Solana, Cardano, and XRP in a national crypto reserve initially fueled a market rally. However, uncertainty over how the reserve will be formed and funded dampened sentiment. While Trump has signed executive orders exploring crypto regulations, details remain unclear. His previous crypto-related ventures, including the $TRUMP meme token, have struggled, further shaking confidence.

Investor risk appetite took another hit as Trump imposed new tariffs—20% on China and 25% on Canada and Mexico—escalating global trade tensions. While tariffs do not directly impact crypto, they rattled markets, pushing investors towards safe-haven assets like gold and the Japanese yen. Concerns over slowing global economic growth and persistent inflation further weighed on speculative investments.

Ether slumped 14% to $2,106, while XRP dropped 16.1% to $2.3597. Solana and Cardano, both part of Trump’s reserve list, plummeted 18.9% and 22.7%, respectively. Polygon shed 15.5%, while meme token Dogecoin slid 15.2%. The $TRUMP token crashed 22.8%, nearing record lows.

Despite the downturn, anticipation remains for Trump’s first White House Crypto Summit on Friday, where he may offer regulatory clarity. His appointment of pro-crypto figures to key positions also signals potential long-term policy shifts. However, for now, uncertainty and broader economic concerns continue to drive market volatility.