XRP, ADA face mounting collapse amid Trump Crypto Reserve backlash
From calling it a rug pull to demands for a congressional investigation, the chaos is unmatched.
- The President’s plan to back a U.S. crypto reserve without BTC has sparked intense debate
- Initial price surges for XRP and ADA quickly faded, prompting accusations of a politically motivated pump-and-dump scheme
Donald Trump’s bold push for a U.S. crypto reserve brought crypto to the fore officially, but not in the way many expected.
Instead of focusing solely on Bitcoin [BTC], as he once proposed, Trump’s plan includes XRP, Cardano [ADA], and Solana [SOL] — a move that has ignited fierce debate among crypto leaders and traders alike.
Initially, the market reacted with enthusiasm, driving up prices for these altcoins as speculation ran wild. However, the excitement quickly turned to skepticism.
By the start of the week, the gains had vanished, with XRP and ADA suffering double-digit losses.
Industry heavyweights are now questioning not just the feasibility of Trump’s proposal, but also his true motivations. Is this a strategic financial move, or do political alliances and donations play a role?
Uncertainty surrounding Trump’s crypto reserve
The President’s altcoin-based crypto reserve move was met with immediate volatility in the market, as traders speculated on the potential impact of a government-backed initiative supporting select cryptocurrencies.
However, the legislative hurdles for such a reserve remain steep.
The U.S. government’s existing Bitcoin holdings stem largely from law enforcement seizures, while purchasing additional crypto assets — especially altcoins — would require congressional approval.
With bipartisan skepticism surrounding crypto regulation, the likelihood of this initiative materializing remains uncertain.
Initial price surges for XRP and ADA and the subsequent dip
Following Trump’s announcement, XRP and ADA experienced sharp initial gains, fueled by speculative enthusiasm and the perception that federal backing could legitimize their long-term value.
Over the weekend, both assets saw significant upward momentum, with XRP and ADA showing double-digit surges.
However, by Monday, the euphoria had fully faded. XRP plummeted 18% from its weekend high, while ADA suffered an even steeper decline of 23%.
The sell-off suggests that traders viewed the rally as a short-lived speculative play rather than a sustainable shift in market fundamentals.
The price action reflects a classic ‘buy the rumor, sell the news’ scenario, where investors capitalized on initial enthusiasm before taking profits amid doubts about the reserve’s feasibility.
Industry backlash mounts and Trump’s reserve faces scrutiny
Trump’s decision to prioritize XRP and ADA over Bitcoin has drawn sharp criticism from industry leaders, who question both the rationale and feasibility of the proposal.
Many argue that favoring altcoins with relatively limited adoption — particularly over Ethereum or Bitcoin — undermines the credibility of the reserve.
Bitcoin advocate Samson Mow dismissed the proposal outright, stating:
“Either this ends up being a Bitcoin reserve in practice, or we spiral into a new level of degeneracy.”
Former BitMEX CEO Arthur Hayes was equally skeptical, emphasizing that without congressional approval or a financial mechanism to fund purchases, the plan holds little weight.
Beyond feasibility concerns, some speculate that Trump’s selection of XRP, ADA, and SOL may have been politically motivated.
Ripple, the company behind XRP, donated $5 million to Trump’s inauguration. Meanwhile, Solana has close ties to the President’s supporters, with the TRUMP memecoin launched on its network.
Rather than a strategic financial move, the inclusion of these assets could be a calculated effort to secure backing from specific crypto ecosystems.
The backlash has intensified further, with critics suggesting that Trump’s announcement may have been part of a coordinated pump-and-dump scheme.
Economist Peter Schiff called for a congressional investigation, questioning the timing of Trump’s Sunday afternoon posts and whether insiders were given advance notice.
“Donald Trump, the first crypto President, just helped pull off the biggest crypto rug pull of all time. A Congressional investigation is now warranted to find out the following regarding this pump and dump scheme.”
He questioned,
“Who authored the two Sunday afternoon posts on the President’s Truth Social account? Who knew about the first post in advance, and when were they first informed of the wording of the post and the timing of its release?”
Interestingly, Bloomberg analyst Joe Weisenthal pointed out that despite Trump’s direct endorsement, XRP failed to hold its gains — signaling that the broader market remains unconvinced of its long-term role in a government-backed reserve.
