Trump’s Crypto Reserve Plan Triggers Market Volatility, Bitcoin Faces Correction

Bitcoin's Manufacturing PMI Signals Extended Bull Market Despite Trump's Reserve Proposal and Mining Sector Challenges

  • Bitcoin‘s recent volatility follows Trump’s crypto reserve announcement, but manufacturing PMI data suggests the bull market is far from over with a potential peak in late 2025 or early 2026.
  • Industry leaders including Coinbase and Gemini CEOs advocate for a Bitcoin-only reserve, questioning the inclusion of altcoins in a national cryptocurrency strategy.
  • Mining companies face significant financial pressure post-halving, with average revenue and gross profit declines of 46% and 57% respectively according to JPMorgan.

Markets experienced a rollercoaster ride after US President Donald Trump unexpectedly announced plans for a national cryptocurrency reserve including Bitcoin, Ether, XRP, and Solana. The initial price surge quickly reversed within 24 hours, leaving Bitcoin teetering on the edge of a bearish reversal and raising concerns about a premature end to the bull market.

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However, economic indicators suggest that Bitcoin’s upward trajectory remains intact despite recent volatility. The Manufacturing Purchasing Managers Index (PMI), a key business cycle indicator historically correlated with Bitcoin Price movements, entered growth territory in January for the first time in over two years. This positive shift in the manufacturing sector signals economic expansion, typically a bullish sign for cryptocurrency markets.

According to Real Vision founder Raoul Pal, current PMI trends point to a Bitcoin cycle peak that could arrive in late 2025 or potentially early 2026. Historical patterns show that Bitcoin’s previous cycle tops in 2017 and 2021 closely aligned with PMI peaks, adding credibility to this analysis.

Trump's Crypto Reserve Plan Triggers Market Volatility, Bitcoin Faces Correction

The proposed multi-cryptocurrency reserve has drawn criticism from industry leaders. Coinbase CEO Brian Armstrong and Gemini CEO Tyler Winklevoss both expressed concerns about including assets other than Bitcoin. Winklevoss stated, "Only one digital asset in the world right now meets the bar and that digital asset is Bitcoin," while Armstrong concurred that "Just Bitcoin would probably be the best option," describing it as the only "successor to Gold."

Even longtime Bitcoin critic Peter Schiff acknowledged Bitcoin’s digital gold thesis while questioning the inclusion of altcoins in a national reserve. Trump’s Commerce Secretary Howard Lutnick later clarified that the administration would likely treat Bitcoin differently from other assets in any potential crypto reserve.

Trump's Crypto Reserve Plan Triggers Market Volatility, Bitcoin Faces Correction

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Meanwhile, corporate Bitcoin accumulation continues despite market volatility. Japanese investment firm Metaplanet purchased an additional 497 BTC at an average price of $88,448, boosting their total holdings to 2,888 BTC (approximately $251 million). This acquisition ranks Metaplanet among the top dozen publicly traded Bitcoin holders, according to industry data. The purchase sent the company’s stock price upward, reflecting ongoing institutional interest in Bitcoin despite short-term price fluctuations.

Often referred to as "Asia’s MicroStrategy," Metaplanet announced plans in January to raise over $700 million specifically for future Bitcoin acquisitions, demonstrating continued institutional confidence in the asset’s long-term value proposition.

Bitcoin miners, however, continue to face significant challenges following April’s halving event. JPMorgan reports that Bitcoin mining stocks collectively declined 22% in February, with companies like Riot Platforms, Bitdeer, Marathon Digital, and Core Scientific all experiencing price drops after their quarterly earnings reports.

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The post-halving environment has been particularly harsh, with miner revenues decreasing by an average of 46% and gross profits falling by approximately 57%, according to JPMorgan’s analysis. Even Core Scientific, which reported better-than-expected sales for Q4 2024, couldn’t escape the broader market downturn affecting the mining sector.

Trump’s first month in office proved challenging for cryptocurrency markets, with Bitcoin recording its worst February performance in a decade amid escalating trade war threats. However, economic indicators suggest the current cycle may have considerable room for growth before reaching its peak, despite ongoing regulatory uncertainties and market volatility.

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