Bitcoin and other major cryptocurrencies experienced a pullback on Monday, reversing earlier gains fueled by US President Donald Trump’s proposal to create a national strategic reserve of cryptocurrencies, according to Reuters.
While Trump’s announcement initially sparked optimism, market participants are now adopting a cautious stance as they await further details about the plan.
Over the weekend, Trump revealed plans to establish a reserve of cryptocurrencies, including Bitcoin, Ethereum, XRP, Solana, and Cardano. The announcement, made on his Truth Social platform, initially boosted Bitcoin prices, which rose 2.4% from Friday’s levels to $86,292. However, the cryptocurrency has since retreated, down 8% from Sunday’s peak.
Trump’s proposal aims to build a stockpile of digital assets as part of a broader strategy to support the crypto industry. However, the lack of specific details has left investors uncertain about the feasibility and implications of the plan.
Anthony Pompliano, founder of Professional Capital Management, criticised the plan as an “unforced error” that could enrich insiders at the expense of US taxpayers. Cameron and Tyler Winklevoss, co-founders of the Gemini crypto exchange, also voiced reservations. While they acknowledged Bitcoin’s potential as a store of value, they questioned the inclusion of other cryptocurrencies in the reserve.
Bitcoin’s recent volatility reflects broader uncertainty in the crypto market. The cryptocurrency fell more than 17% in February, its largest monthly decline since June 2022, and has lost over a third of its value since reaching a peak of $105,000 in early January.
Meanwhile, the crypto market continues to grapple with volatility and regulatory uncertainty, underscoring the challenges of integrating digital assets into mainstream financial systems.
