XRP and ADA Falling: Trump's Crypto Reserve Impact

Donald Trump's latest initiative to create a cryptocurrency reserve in the United States, consisting of various digital assets, has provoked mixed reactions in the crypto community. The president is proposing to include not only Bitcoin (BTC), but also some altcoins.

After Trump's announcement on the possible inclusion of XRP, Cardano (ADA) and Solana (SOL) in the US crypto strategic reserve, the prices of these coins skyrocketed. However, due to criticism of the US president, altcoin prices have since collapsed. Let's try to understand why.

Criticism of Trump's plans

Since Trump announced the possible addition of XRP, ADA and SOL to the US crypto reserve, the market has experienced increased volatility. During the election campaign, the politician had advocated the inclusion of only Bitcoin in the reserve, but now everything has changed.

The crypto community has reacted in mixed fashion to Trump's new plans. Many industry leaders have criticised the US president's decision to expand the list of assets included in the crypto reserve.

"I am pondering the possibility of a strategic Bitcoin/cryptocurrency reserve in the US and I only see two possible scenarios: the reserve will be in BTC, without any of the altcoins mentioned, or the market will be flooded with degens" - Samson Mow.

The idea of creating a national Bitcoin reserve seemed more reasonable. The US government already controls a significant amount of BTC, seized during federal investigations. Trump, on the other hand, could not purchase the necessary amount of altcoins without the approval of Congress, which will probably not support this initiative at all.

"Nothing new, just words. Let me know when Congress approves the use of funds or raising the price of gold. Without that, they don't have money to buy Bitcoin and other cryptocurrencies."

Arthur Hayes, former CEO of BitMEX.

What's happening to XRP and ADA?"

Trump's crypto reserve announcement initially sparked a strong rally among the altcoins mentioned. In less than 24 hours, ADA was up 60%, while XRP was up 30%. However, the bull run was short-lived.

According to data from CoinMarketCap, at the time of writing Cardano is trading at $0.8127, down 19% in the past 24 hours and trading volume down 32%.

At the same time, XRP is down almost 14%, currently trading at $2.32, after touching a high of $2.70 on the last day

A politically motivated decision?

According to popular opinion, Trump's decision to include XRP and ADA in the crypto reserve would be a way of 'thanking' Ripple and Cardano for donations received during his election campaign. Solana has also received strong support from the president's administration: the Official Trump (TRUMP) memecoin has been launched on the SOL network.

A possible large-scale federal takeover could benefit XRP, Cardano and Solana, while the political proximity between the respective companies and the president could play a key role.

"For ETH and SOL, the choice is understandable, given their active development and the increase in the number of developers. But I don't understand why XRP and ADA were included in the crypto reserve, given that they are clearly inferior to Ethereum and Solana. The total value of locked assets (TVL) and the possibilities offered by stablecoins on XRPL and Cardano are minimal compared to other projects."

Harrison Seletsky, Director of Business Development at SPACE ID.