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QCP Capital: Trump's cryptocurrency reserve plan triggers market fluctuations, trade tensions exacerbate risk asset pullback

QCP Capital: Trump's cryptocurrency reserve plan triggers market fluctuations, trade tensions exacerbate risk asset pullback

Bitget2025/03/04 10:51

In a message from ChainCatcher, QCP Capital's latest analysis pointed out that the brief market rebound after Trump announced a cryptocurrency reserve plan on Truth Social on Sunday quickly faded. Risk assets generally pulled back, erasing most of Sunday's gains. Trump's renewed push for tariffs on Canada, Mexico and China exacerbated this sell-off, intensifying investor concerns about escalating trade tensions.

The analysis pointed out that the unexpected inclusion of XRP, SOL and ADA tokens in the reserve plan has caused divisions within the crypto community. The initial optimism about the project’s advantages has shifted towards deeper scrutiny. Current doubts mainly focus on potential contradictions between this plan and DOGE cost-cutting measures as well as issues with opaque sources of reserve funds.

QCP Capital stated that this market downturn could increase pressure on Trump, especially after receiving strong support and donations from the crypto community during his campaign period. Even if the U.S Securities Exchange Commission (SEC) suspends and revokes enforcement cases against crypto companies it did not prevent market selling which highlighted broader risk-averse sentiment in markets.

The report noted that after experiencing a month of low cross-asset volatility, market anxiety re-emerged due to prospects of tariff confrontations potentially suppressing global growth. This shift is reflected in 10-year US Treasury yields falling by 50 basis points over past two weeks; VIX breaking through 22; Bitcoin short-term volatility sharply rising by eight points since weekend; skewness significantly shifting towards put options.

Previous news indicated that Trump launched a strategic cryptocurrency reserve possibly to boost approval ratings with markets focusing attention on Friday’s White House cryptocurrency summit.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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