Trump’s Bitcoin Reserve Plan Backfires: European Central Bank Warns of Crypto Market Crash

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Trump’s recent tariff policies have backfired, and the Bitcoin reserve plan, which gave the industry its long-awaited milestone of BTC hitting $109K, faded as the market realized Trump’s policies are politically driven, creating panic and fear in the market for crypto assets. This raised global concern about how safe crypto assets are for bringing them into the mainstream financial zone, as discussed by an influential figure in the EU council. Let’s dive in.

ECB’s Villeroy Sounds the Alarm

Francois Villeroy de Galhau, a senior member of the European Central Bank’s Governing Council, has voiced strong concerns about the US approach to crypto. In an interview with La Tribune Dimanche, he warned that financial crises often originate in the US and spread globally. By supporting digital assets and non-bank financial systems, the American administration is taking unnecessary risks that could destabilize the global economy.

Villeroy assured that Europe’s financial system is well-regulated, minimizing any threat of a banking crisis. He also called for a stronger international role for the euro, urging Europe to build a powerful savings and investment union to attract global capital.

Crypto as a Solution, Not a Threat

Not everyone agrees with Villeroy. Crypto analyst Christopher Perkins strongly opposes his stance, arguing that digital assets reduce financial risks. He highlights the 1974 Herstatt Bank collapse as a cautionary tale of traditional finance failures. Unlike conventional assets, which take days to settle, crypto transactions occur in real time, improving liquidity and reducing systemic risks. Drawing from his experience during the Lehman Brothers collapse, Perkins stresses that liquidity is everything—and crypto enhances it. He urges Europe to embrace blockchain technology for faster settlements and improved financial security.

Trump’s Memecoin Mania

Beyond policy changes, Trump has also been linked to the memecoin craze. Reports suggest his family has endorsed unregulated tokens since he took office, using his political influence to pump and dump assets. Many believe he is leveraging the crypto industry to recover his election spending and build personal wealth at the expense of investors. This has drawn comparisons to past economic downturns caused by his financial strategies.

Bitcoin Reserve Plan Raises Questions

Meanwhile, Trump continues to push pro-crypto policies, including a Strategic Bitcoin Reserve and a separate digital asset stockpile. His administration has also rolled back several SEC lawsuits against crypto firms.
However, analyst Bakcho_Panda highlights a major twist in the Bitcoin Reserve plan—the US is not buying BTC. Instead, it’s selling seized crypto, leading to speculation that the reserve grows only when more assets are confiscated. This raises concerns that the government may use crypto crackdowns to expand its holdings while presenting itself as a supporter of digital assets.