Solana Falls 3% After Trump’s Crypto Reserve Announcement

Solana, one of the largest cryptocurrencies, has dropped 3% to $146.76 following President Trump’s executive order to establish a national crypto reserve. The announcement initially sparked interest, especially after Trump mentioned Solana as a potential reserve asset in a recent TruthSocial post. However, with no clear plan to purchase Solana, Bitcoin, or other digital currencies, investor enthusiasm has faded.

Despite the price decline, Solana’s trading activity remains strong, with its 24-hour volume surging more than 12% to $4.8 billion. This suggests that while some investors are selling, others see an opportunity in the volatility.

Anatoly Yakovenko, co-founder of Solana, has openly criticized the idea of government involvement in crypto reserves. He argued that such a move contradicts the core principles of decentralization, stating, “If you want decentralization to fail, you’d put the government in charge of it.” His comments reflect broader concerns in the crypto community about increased government influence over digital assets.

Industry experts have also raised red flags about the potential risks of a government-backed crypto reserve. Jason Yanowitz, co-founder of Blockworks, warned that without clear selection criteria, the initiative could lead to market manipulation and undermine investor trust. “There must be transparency and rigorous standards for asset selection. Without it, we risk distorting the market and damaging public confidence,” he said. Many analysts fear that government control could favor certain cryptocurrencies over others, disrupting the industry’s organic development.

Even before Trump’s announcement, Solana had been facing challenges. Over the past month, investors have withdrawn more than $485 million from Solana, shifting their funds to more stable assets like Bitcoin. Part of the sell-off has been linked to controversies surrounding Solana-based tokens, including the LIBRA memecoin and Trump-themed cryptocurrencies. These developments have added to market uncertainty, making some traders hesitant about Solana’s short-term prospects.

Meanwhile, Bitcoin continues to strengthen as investors seek stability amid market turbulence. A Binance Research report shows that Bitcoin’s dominance in the crypto market has increased by 1% in the past month, now accounting for 59.6% of total market capitalization. This trend suggests a broader shift towards safer investments as traders navigate uncertainty surrounding altcoins.

For now, the lack of clear details about how the U.S. government plans to structure its crypto reserve is keeping investors on edge. If the administration provides more transparency regarding asset selection and management, market sentiment could shift. Until then, Solana and other cryptocurrencies may experience continued volatility as traders react to potential government involvement in the digital asset space.

Also Read: Government Bitcoin Reserve Established Under Trump’s New Executive Order