Bitcoins
The new Bitcoin token is photographed on U.S. $100 bills.
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Crypto reversed most of its losses Tuesday afternoon, with the price of bitcoin climbing back toward the key $90,000 level.
The flagship cryptocurrency was last higher by more than 1% at $86,927.54, according to Coin Metrics, and off its all-time high by 20%. Ether rose less than 1% to about $2,100 after earlier dropping to a November 2023 low.
Ripple-related XRP and Cardano’s ADA, two of the smaller-cap coins mentioned in Trump’s surprise announcement, rose 1.8% and 4.6%, respectively. Solana’s SOL token was in the red but trading off its lows.
Bitcoin before and after Trump’s crypto reserve announcement
Stocks tied to the price of bitcoin also clawed their way back into the green. Coinbase advanced more than 3%, while the bitcoin proxy stock Strategy, formerly known as MicroStrategy, jumped 10%. Pure-play bitcoin miners were all higher, with Mara Holdings gaining 1.4%. Robinhood rose slightly.
Risk assets including cryptocurrencies suffered steep declines on Monday as traders grappled with concerns that proposed tariffs were on track to take effect. That overshadowed the exuberance around Trump’s so-named U.S. “strategic crypto reserve,” which some traders had hoped would pull bitcoin out of a slump. After reaching its record in January, it posted its worst month since 2022 in February.
“Bitcoin and Ethereum holding steady while stocks slide suggests that crypto traders already priced in macro risks before traditional markets fully reacted,” Ben Kurland, CEO at crypto research platform DYOR.com, told CNBC. “The tariff war, inflation concerns and broader economic uncertainty have been weighing on equities, but crypto had its major sell-off earlier, which likely flushed out excess leverage.”
“That said, if equities continue dropping and risk-off sentiment deepens, crypto isn’t immune,” he added. “We could still see delayed selling pressure as larger investors rebalance portfolios. Right now, bitcoin’s stability could be more about a lack of aggressive sellers rather than a sign of strength.”
Monday’s sell-off triggered a wave of long liquidations, which forces traders to sell their assets at market price to settle their debts. Over the past 24 hours, approximately $251 million in bitcoin and $146 million in ether were liquidated, according to CoinGlass.
Investors and analysts have warned that economic uncertainty could keep its hold on bitcoin throughout March, with the crypto industry absent a specific catalyst. With the idea of a U.S. reserve holding crypto largely priced in, regulatory clarity through clear legislation may be the more likely catalyst to jump-start prices in a meaningful way.
“The lack of information on the amount of crypto the U.S. government will buy, and how the purchase will be funded, coupled with fears of a market retreat if expectation does not meet reality, means that the likelihood of high volatility in the crypto markets will continue,” Deutsche Bank analyst Marion Laboure said in a note Tuesday.
Investors this week will keep an eye on the inaugural White House Crypto Summit, which is scheduled to take place Friday, for updates on the details of the reserve, as well as the administration’s plans to support the industry.
— CNBC’s Michael Bloom contributed reporting
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