An avalanche shakes the markets. In just 24 hours, cryptoassets have lost 500 billion dollars in market capitalization, a collapse that drags bitcoin (BTC), ether (ETH), Ethereum cryptocurrency, and other assets into a steep decline.

Everything points to an explosive cocktail: the trade war driven by the United States and an unexpected twist after the announcement of a strategic cryptocurrency reserve by United States President Donald Trump, according to analysts from The Kobeissi Letter financial newsletter.

What began as a glimmer of hope for investors turned into what analysts from The Kobeissi Letter describe as "a colossal trap for retail trading."

The backdrop could not be more tense. As the world's economic powers clash in trade, cryptocurrencies sink into a sea of uncertainty.

An announcement that lit the fuse

On March 2, Donald Trump burst onto the scene with a statement that seemed promising for the world of cryptocurrencies.

In the morning hours of that day, it confirmed the creation of a strategic cryptocurrency reserve for the United States, a plan that would initially include assets from local companies like XRP, SOL, and ADA, but would later expand its scope to BTC and ETH, as reported by CriptoNoticias.

The news generated immediate euphoria: that same day, the cryptocurrency market surged from 2.7 billion to 3.1 billion dollars, recovering lost ground from previous weeks.

However, the joy was short-lived. In the last 24 hours, the outlook took a dramatic turn. Markets fell to 2.6 billion dollars, placing them 100 billion below levels prior to the reserve announcement.

Bitcoin and Ethereum down

Bitcoin, for example, recorded a 10% drop in its price, erasing nearly 250 billion dollars from its market capitalization in the last 12 hours. Currently, it is trading 3% below its value before the announcement.

Ether, for its part, fell from a low of 2,173 dollars on March 2 to a peak of 2,550 dollars, only to crash to 2,104 dollars, 8% lower than its lowest point when the cryptocurrency reserve announcement was made.

Analysts from The Kobeissi Letter have no hesitation in pointing it out: the initial surge was a mirage.

"The market fell into a trap designed to lure retail traders," they indicate, highlighting how the Crypto Fear & Greed index from CoinMarketCap went from 20 (extreme fear) to 55 (near greed) after the announcement, only to plummet again to 24.

The trade war enters the scene

The collapse is caused by trade tensions reaching a new peak. Yesterday, Trump confirmed a 25% tariff on products from Canada and Mexico, a measure that came into effect on Tuesday, March 4.

"There is no room for Mexico or Canada," the president asserted, emphasizing that the time for negotiation has run out. This is compounded by an additional 10% tariff on Chinese imports, which stacks on top of another 10% rate in effect since February 4.

China, for its part, responded with tariffs of 10% to 15% on American food products, labeling Washington's actions as "unilateralism and bullying."

The result is clear: global markets feel the impact. Stocks, oil, and cryptocurrencies plummet, while safe havens like gold and the US dollar gain ground.

"Risk assets are being crushed," analysts from The Kobeissi Letter point out. And in this context, bitcoin and its peers do not escape the label of "risky," according to analysts.

Bitcoin is volatile, but not risky

The volatility of bitcoin is no secret. Its price can soar or collapse within hours, and this episode proves it.

However, beyond the fluctuations, it eliminates counterparty risks and offers resistance to censorship, characteristics that make it a potential refuge in political or financial crises.

On the other hand, its dependence on speculation and limited mass adoption aligns it with traditional risk assets, such as tech stocks.

A future of uncertainty and volatility

As markets digest these shocks, analysts from The Kobeissi Letter warn that the worst may be yet to come. The Goldman volatility panic index rose from 1.4 in December to 9.1 on Friday, nearing level 10.

"Volatility is the new normal," analysts declare, anticipating even more pronounced fluctuations in cryptocurrencies.

The 500 billion dollar collapse in the market is not just a number: it is a reflection of a transforming world. The trade war, unpredictable economic policies, and distrust in the ac$BTC

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risk assets have created a perfect storm.