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A bitcoin rally faded Monday as traders grappled with concerns that proposed tariffs were on track to take effect.
Concerns about the economic impact from these levies overshadowed earlier excitement about President Donald Trump‘s announcement of a U.S. strategic crypto reserve. Bitcoin was last trading down 8% at the $86,000 level, according to Coin Metrics. Ether is was down about 15% to $2,100.
Meanwhile, stocks tied to cryptocurrencies also reversed direction. Coinbase and Robinhood fell 4.6% and 6.4%, respectively. Shares of MicroStrategy swung from a 14% rally when the market opened to trading down more than 1.8% Monday afternoon.
Bitcoin
Over the weekend, Trump announced the creation of a strategic crypto reserve – a pivot from the “bitcoin stockpile” he previously touted – that he said will include ether, XRP, Solana’s SOL token and Cardano’s ADA, in addition to bitcoin. Bitcoin rose as high as $95,000, while the smaller coins rocketed double digits.
It was welcome news to investors, who felt the pain last week as bitcoin fell under the key $90,000 level for the first time in three months to, at one point, 25% below its January all-time high. That break below support put it at risk of a bigger slide toward $70,000. Losses in smaller, riskier coins have been even steeper.
It wasn’t exactly enough of a catalyst though to pull bitcoin out of its consolidation phase. Investors have warned that the flagship coin could be defenseless against macro concerns absent a crypto-specific theme or catalyst to look forward to.
“The effect of Trump’s [crypto reserve] comment will not continue,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank. “The price may go up because of other developments this week, but Trump’s comment is already digested.”
Furthermore, “there was no particularly new [announcement],” he added. “They are still moving in the direction to establish the crypto reserve,” as outlined in Trump’s January executive order on crypto, “it was not an announcement to actually establish it.”
It’s still possible the crypto reserve could become a bigger catalyst — investors this week will be watching for clues about the direction of the reserve plans. White House artificial intelligence and crypto czar David Sacks teased in a post on X that there would be “more to come” at the first White House Crypto Summit, scheduled to take place this Friday.
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Luz Volkman
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