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Bitcoin Drops Nearly 10% as Investors Flee Risk
Bitcoin’s value plummeted by nearly 10% on Monday, March 3, as concerns over a growing trade war and uncertainty surrounding a proposed US cryptocurrency reserve fund rattled investors.
Following President Donald Trump’s remarks about establishing a national cryptocurrency reserve, Bitcoin and other digital assets initially surged. However, doubts about whether the plan would materialize triggered a sharp sell-off.
“Everything is getting sold,” said Adam Button, manager at Forexlive. “There’s a de-risking that’s unfolding among crypto investors.”
By late Monday, Bitcoin had fallen 9.47% to $85,321.69, with the overall cryptocurrency market valued at more than a trillion dollars.
Broader Crypto Market Decline
Ethereum, the second-largest digital asset, experienced an even steeper drop, losing over 15% of its value. Other major cryptocurrencies, including XRP, Cardano, and Solana, tumbled by nearly 20%.
Market sentiment was further weighed down by Trump’s announcement of 25% tariffs on all imports from Mexico and Canada, both of which have vowed to retaliate. Analysts believe the escalating trade conflict is amplifying concerns about weakening US economic growth.
Uncertainty Over US Crypto Reserve Fund
Cryptocurrency prices initially climbed on Monday after Trump named five digital currencies—Bitcoin, Ethereum, XRP, Cardano, and Solana—as potential assets for a proposed US national strategic reserve fund.
The plan involves using digital assets already in US possession, including those seized in legal cases or frozen due to sanctions.
However, industry experts have expressed skepticism about the selection of cryptocurrencies. Coinbase CEO Brian Armstrong suggested that restricting the reserve to Bitcoin would be the most prudent choice. “It’s the simplest, and there’s the idea that it could be a successor to gold,” Armstrong stated in a post on X.
Investors Question Feasibility of the Reserve
Despite Trump’s endorsement of the reserve fund, skepticism remains about its viability. “Everyone started buying after Trump mentioned it, but then they wondered if it was really going to happen,” Button explained.
For the proposal to become reality, it would need approval from Congress. “It’s one thing to tweet about it, but you need legislation to make this happen,” Button added. “And that’s still a long shot.”
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