Major Tokens Plummet Amid Tariff Chaos

Major tokens such as Cardano’s ADA, XRP, and Solana’s SOL plummeted 21% on Tuesday, shortly after a surge fueled by President Donald Trump’s announcement of a U.S. crypto strategic reserve. The drop erases all gains from the initial excitement.

Market Reaction

The sharp reversal coincided with trader caution following Monday’s market rally inspired by Trump’s ambitious plan, as noted by a CoinDesk analysis.

Trump’s Sunday declaration that the reserve would include ADA, XRP, and SOL, alongside bitcoin (BTC) and ether (ETH), sparked a frenzy. ADA surged over 60%, XRP rose 33%, and SOL increased by 22% in just hours. The potential for a government-backed crypto stockpile was seen as a game-changer, with analysts forecasting it could legitimize digital assets and encourage institutional adoption.

Profit-Taking and Risk-Off Mood

However, the rally was short-lived, overshadowed by profit-taking and a general risk-off sentiment in broader equity markets.

Kevin Guo, director of HashKey Research, stated via Telegram that “Trump’s latest tariff announcements on Canada, Mexico, and China caused a massive selloff of crypto assets, completely reversing the previous day’s crypto strategic reserve gains.”

He added that despite various pro-crypto deregulation initiatives, investors regard cryptocurrencies as risk assets tightly linked to U.S. equity market performance.

Tariff Updates

On Tuesday, China declared a 15% tariff on numerous imports, while Trump doubled the tariff on imports from China to 20% and confirmed that 25% tariffs on goods from Mexico and Canada would take effect.

In response to the macroeconomic turmoil, Bitcoin dropped 9% over the past 24 hours, trading at $84,000. Ether lost 12% and is now just above $2,000 — its lowest level since 2023.

Upcoming Crypto Summit

With a White House Crypto Summit scheduled for Friday, investors are gearing up for potential clarity or further turbulence based on the outcomes of the discussions.