From Euphoria To Collapse : Why Cryptos Are Tumbling ?

The financial markets often evolve in rhythm with political decisions, and the world of crypto is no exception. This Sunday, Donald Trump sparked investors’ attention by announcing that his crypto reserve project would include several major assets, including XRP, Solana, and Cardano. Initially, Bitcoin seemed to be absent from this list, leading to doubts about the former president’s stance on it. A quick adjustment then corrected the course, as he stated that Bitcoin and Ethereum would obviously be included. This turnaround triggered a surge of optimism and a price explosion, but the enthusiasm was short-lived. However, in less than 24 hours, the market turned. The cause was the growing concerns about the tariffs that Trump plans to impose, rekindling fears of economic instability.

The Trump Effect : from Hope to Disillusionment

Donald Trump’s intervention in the crypto space initially generated a renewed sense of optimism among investors. Indeed, on Sunday, March 2, 2025, the American president stated that the United States would establish a crypto reserve, specifically mentioning XRP, Solana, and Cardano. This announcement quickly drove prices up, with Bitcoin reaching $94,000 in the moment’s euphoria. However, the initial absence of BTC from this list raised concerns. To dispel any ambiguity, Trump released a second message stating: “and, obviously, BTC and ETH, as well as other valuable cryptos”.

This change in tone generated unusual volatility. Speculators took advantage of this rise to realize quick profits, which caused a brutal correction as the initial hype faded. Subsequently, Ethereum dropped to $2,192, XRP fell to $2.47, while Solana contracted to $148. Dogecoin, which wasn’t even mentioned in the reserve project, also suffered a setback and showed a 9 % loss in 24 hours. This sudden drop was exacerbated by an influx of liquidations in the derivatives market. According to CoinGlass, over $661 million in positions were liquidated, including $517 million in long positions.

The Impact of Economic Fears and Trade Tensions

While Trump’s announcement was a catalyst for volatility, it quickly faded behind more tangible economic concerns. The crypto market followed the trend of traditional stock indices, particularly the Dow Jones, S&P 500, and Nasdaq, all retreating in the face of inflation prospects and trade tensions. Moreover, one of the triggers for this correction was the announcement of new tariff increases against Canada and Mexico, scheduled for Tuesday. This is compounded by trade restrictions against China, further fueling uncertainty.

In this tense climate, institutional investors have reduced their exposure to risk assets, leading to a wave of sales on Bitcoin and altcoins. Meanwhile, Nvidia, one of the leaders in the artificial intelligence market, saw its stock plunge by 6% in one day, highlighting a general retreat in tech and speculative stocks. These signals reflect an increased market distrust regarding a possible return to protectionist policies, which could slow growth and weigh on the liquidity of financial assets, including cryptos.

At $83,933, Bitcoin shows a 6 % drop over 24 hours, just like the entire crypto market sinking into the red. Ethereum, Solana, and Cardano are experiencing significant declines, while massive liquidations further weaken the situation. This downward movement underscores the sensitivity of cryptos to political and macroeconomic decisions, indicating their status as highly speculative assets.

The question remains: will the markets regain their momentum or sink into a new phase of instability? It will all depend on the evolution of trade tensions and the actual impact of the measures announced by Trump. If the tariff policy tightens, the markets risk prolonging their correction. Conversely, a calming of tensions could allow cryptos to regain their upward trajectory. Until then, investors will have to deal with extreme volatility, characteristic of a sector where the slightest political signal can reverse trends in a matter of hours.