What Happened with Crypto Since Trump's Quick Message?

That's a good question, wouldn't you say? Something I've asked myself and came up with enough scenarios, some very plausible, others quite wild. But I thought I should share all of them anyway.

Let's see.

In his characteristic MAGA and communication manner, Trump put out a quick message where he talked about the US Strategic Crypto Reserve, but nominated only three coins as being included: XRP, SOL, and ADA. He didn't say those would be the only ones. What do the three have in common, other that being controversial choices? They all have strong ties with America. So, Trump doesn't move an inch from his MAGA direction.

Probably under advise, he later mentioned that, of course, the US Strategic Crypto Reserve will include BTC and ETH.

As a result, the crypto market pumped hard. We are talking about roughly 10% BTC, about the same ETH, and between 30% to 60% the nominated coins, but most coins had consistent gains within a few hours.

When the trading day on exchanges reset, it tried to move higher, but it was clear to me it was struggling. I didn't stay long enough to see the prices tumble during the night, but I could see afternoon trading in the US and early trading in Asia didn't look very enthusiastic based on the news.

And now the scenarios. What happened?

The likely scenarios:

1. Tariffs

There are three scenarios based on tariffs, in my opinion. One where Trump is the good guy and the second where Trump is the bad guy. It's up to you to believe what type of game Trump played here.

In all scenarios Trump knew the dates when tariffs would be announced (meaning yesterday) and that they wouldn't be delayed further, changed, or dropped. Starting last midnight, 25% US tariffs are in effect with Mexico and Canada. Also, starting with April 2nd, an additional 10% (for a total of 20%) US tariffs will be applied to China. China hasn't retaliated yet, but they issued a very strong response via the Foreign Affairs Minister (or how it's called in China), potentiated by the 100bn deal between TSMC and the US too, when they consider Taiwan their own.

Let's start with the positive, but sort of naive scenario for crypto.

Let's say, Trump was being told about the bad shape crypto was in and that it was likely to be hit harder because of the tariffs, so either he was advised or he decided to make the announcement about the US Strategic Crypto Reserve to push the prices higher so they have some room from where to fall. That's Trump being nice.

Trump or his nearby people being bad would be profiting of the situation by pumping and dumping. That would be bad. But they also have the precedent of launching their own meme coins which is pretty much a potentially perpetual P&D scheme, no matter how we look at it or who launches it....

2. Crypto Hurt in the Crossfire Between Trump and His Adversaries

The alternative to Trump or his nearby people being bad is his growing number of adversaries making it look like this, at the expense of crypto. It is obvious Trump came in his second term with a day-by-day plan. To be honest, I don't think we've seen anything like that before in politics, like Trump or not (and I'm more in the "not" part). But the more time passes the more he will be fight at every step, particularly since he picks these fights too.

In my opinion, one of these scenarios are the most likely for what happened these days. Tariffs and the real economy obviously matter more than than a US Strategic Crypto Reserve, as it should.

3. Crypto Market Disappointed by the Choices

I do believe many expressed their disappointment. Bitcoin maximalists for sure were very affected because the reserve won't be bitcoin-only. But maximalists are known for... not having alts, right? So, how come alts were the fist that came under heavy fire? I don't know... There is a lot of tribalism in crypto, but I don't think they would be collectively so irresponsible to risk an early ending of the bull market, which becomes more and more likely.

4. Bad Timing

Could be a real bad timing, when profiting of the FUD from the tariffs and geopolitics, some real influential actors in the crypto spaces wanted to shake the market really well before potentially letting it go? And maybe they got pissed by the announcement which messed up their plans, so they nullified its effects.

5. Bear Market?

As much I don't like this possibility.. What if the bear market started early, potentiated by the economic and geopolitical context? I still doubt it, because Trump administration measures for crypto haven't even started yet.

What do you think happened yesterday and since Trump message with crypto?

Posted Using INLEO