Dogecoin (DOGE), Ethereum (ETH), and Solana (SOL) have all experienced significant double-digit drops in the last 24 hours, following a surge after President Trump’s announcement of a federal crypto reserve last Friday.
Ethereum (ETH) has taken a hit, dropping 11.4% in the past day and 13.9% over the week, according to CoinGecko. This downturn comes even after Trump suggested including ETH in the U.S. crypto reserve in a post on Truth Social. ETH’s price plummeted to $2,035, hitting its lowest point since November 2023, and its value compared to Bitcoin also reached a record low last month.
Solana (SOL) also saw a sharp decline, falling 16.1% in the last 24 hours and 2.9% for the week, even with Trump’s crypto reserve announcement. Currently trading at its lowest price since early September 2024, SOL was already facing headwinds after hitting a previous three-month low just weeks prior, partially due to doubts surrounding Solana-based meme coins.
Dogecoin (DOGE) hasn’t fared much better, experiencing losses of 12.4% in the last day and 6.6% for the week. DOGE is currently lingering at its lowest value since early November 2024. Interestingly, even though Dogecoin wasn’t specifically mentioned in Trump’s reserve plans, it still enjoyed the initial market surge following the announcement, only to fall back down with the rest.
According to Dr. Sean Dawson, head of research at Derive.xyz, a crypto options platform, these rapid price drops might be attributed to the vagueness surrounding the specifics of Trump’s crypto reserve initiative.
Dawson explained, “This market reaction really shows us that while announcements, like Trump’s strategic reserve idea, can create a quick buzz, the lack of clear details and follow-up can easily lead to swift market corrections.” He also cautioned, “We should expect continued volatility as traders try to navigate the uncertainties of the year ahead.”
Dawson also highlighted the criticism from prominent crypto figures who question the inclusion of cryptocurrencies other than Bitcoin in the reserve. Among those voicing concerns are Gemini co-founders Cameron and Tyler Winklevoss, and Coinbase CEO Brian Armstrong. Even investment firm Bernstein has expressed skepticism about this approach.
Cameron Winklevoss recently shared his thoughts on Twitter, stating, “Bitcoin is really the only crypto that makes sense as a store of value reserve asset.” He then added a hesitant, “Maybe Ethereum,” showing a clear preference for Bitcoin.
Valentin Fournier, an analyst at the crypto research firm BRN, offered another perspective. He suggested these significant drops are tied to “Trump’s confirmation of 25% tariffs on goods from Mexico and Canada, set to start on March 4th.” Fournier believes these tariffs are “injecting uncertainty into the market” and triggering a general “risk-off sentiment” among investors.
CoinGecko reports that the overall cryptocurrency market capitalization is down by 10.7%. However, it’s worth noting that cryptocurrencies aren’t the only assets struggling lately. Stocks, particularly in the tech sector, are broadly down as well, likely in anticipation of Trump’s upcoming tariffs.
Looking at traditional markets, at the time of this report, the Nasdaq is down 2.64%, and the S&P 500 is showing a 1.76% decrease, according to Yahoo Finance.
Adding to the mix, crypto research group QCP also highlighted other macroeconomic factors contributing to the crypto market correction, mentioning the decreasing yields of 10-year U.S. Treasury bills as one example.
