Trump’s announcement of a strategic crypto reserve, along with a reduction in leverage from Feb. liquidations, may lead to a more sustainable rally in top altcoins, with ADA likely seeing the biggest pump.
President Trump announced the formation of the reserve on Sunday, naming Ripple (XRP), Solana (SOL), and Cardano (ADA) as part of the initial selection before adding Bitcoin (BTC) and Ethereum (ETH). According to Kaiko’s research, the inclusion of select altcoins in the U.S. strategic reserve will likely accelerate capital rotation in the altcoin market. The top 10 altcoins now account for 77% of altcoin trading volume on U.S. platforms, up from 58% a year ago.
The increased concentration of capital in alt coins could significantly drive their prices up. The reason for this is partly because altcoins are less liquid than Bitcoin, which means small changes in supply and demand can have a bigger impact. ADA, in particular, could see even bigger price moves as it currently lags other assets in the strategic reserve.
The signs of this are already evident. Following the reserve announcement, market volatility surged, especially among altcoins. Within the first 24 hours of the news, intraday volatility spiked for large-cap altcoins, surging past a staggering 600% for ADA. The token has seen the strongest capital inflows since the announcement, with its open interest up 10% year-to-date to $554 million.
Additionally, Kaiko noted that Feb. downturn caused several waves of liquidations, reducing leverage across the top ten altcoins. When combined, these two factors suggest that, while there is a concentrated flow of capital into top altcoins (likely increasing their prices), the reduction of leverage means that the upcoming alt pumps will be less volatile and more sustainable.
