The cryptocurrency market experienced significant volatility this week amid the introduction of new U.S. trade tariffs and President Donald Trump's announcement of a U.S. Crypto Strategic Reserve.
Market Reaction to Trump's Crypto Strategic Reserve
Digital assets initially surged by 20% following Trump's statement related to the proposed reserve, which includes Bitcoin, Ethereum, XRP, Solana, and Cardano. However, market sentiment reversed, leading to an 18% decline the following day. These rapid swings reflected broader market uncertainty as traditional equities also faced pressure from the impending tariffs.
Gold Stability and DeFi Amid Crypto Swings
Gold remains one of the strongest-performing assets, showcasing resilience during economic and political uncertainty. The real-world asset sector, led by projects like MANTRA, demonstrated stability even as other digital assets saw sharp declines. DeFi trading volumes have declined since the initial meme coin hype earlier this year. DeFi projects trade at an average revenue multiple of 2.5x, while fintech and centralized exchanges hold higher valuations.
Stablecoin Market Growth and Institutional Moves
Despite digital asset volatility, the stablecoin market continues to expand, with total supply exceeding $225 billion, indicating steady growth in payment and trading use. Bank of America announced intentions to launch its own stablecoin, marking significant movement by the banking sector towards digital assets.
Amid significant crypto market volatility, the introduction of new tariffs and the growth in stablecoin supply underscore the increasing attention on bridging traditional finance with digital assets.
