Crypto Market Shaken: Tariff War Hits ETH, XRP, And SOL Hard

The cryptocurrency market experienced a significant rally over the weekend, sparked by President Donald Trump’s announcement regarding the inclusion of three additional digital assets—Solana (SOL), XRP, and Cardano (ADA)—in a future national “Crypto Strategic Reserve.” 

This news provided a much-needed respite for the market, which had been grappling with a downturn due to a series of challenges, including a memecoin debacle, a major hack, and ongoing tariff uncertainties.

Initially, president Donald Trump’s announcement led to impressive gains across the board. XRP surged by 32% in the hours following the news, while Solana saw a 27% increase, and Cardano jumped as well. 

However, as the excitement settled, these gains began to fade. In the past 24 hours, XRP has lost 18% of its value, Solana is down 20%, Ethereum (ETH) 25%, and Cardano dropped 25%. Bitcoin, which had briefly rallied by 11%, also experienced a decline of 10% in the same period.

The backdrop of this rally was Trump’s announcement of a 25% tariff on goods imported from Canada and Mexico, a move that has raised concerns among both stock and crypto investors. The president indicated that the time for negotiation had passed, leading to immediate reactions in financial markets.

Despite the boost in interest from Trump’s declaration, details surrounding the establishment of the Crypto Strategic Reserve remain vague. While the president named the currencies to be included, he did not specify when the reserve would be operational or how the government intends to finance these assets. 

This ambiguity leaves investors and industry leaders alike awaiting further clarification, particularly as Trump prepares to host the first cryptocurrency summit at the White House this Friday. 

The event will reportedly feature prominent figures from the digital asset space, including founders, CEOs, and investors, and is expected to shed light on the administration’s plans.

Zach Pandl, head of research at Grayscale, noted the growing trend among investors to diversify their crypto holdings. He emphasized that while Bitcoin remains a focal point for many, the digital asset class is diverse, and investors are increasingly looking for a broader range of exposures similar to those in traditional asset classes.

However, not all industry leaders are on board with the idea of a multi-asset reserve. Brian Armstrong, CEO of Coinbase, suggested that including just Bitcoin might be the simplest and most effective approach. 

Coinbase’s CEO acknowledged the interest in diversification but proposed a market cap-weighted index of crypto assets as a potential alternative to maintain neutrality.

So far, XRP has managed to consolidate at $2.30, down more than 32% from its record high of $3.40 reached during the 2018 bull cycle. 

Featured image from DALL-E, chart from TradingView.com