Bitcoin and other cryptocurrencies cooled off on Tuesday following the inauguration of Donald Trump as the 47th U.S. President, with his initial policy announcements making no mention of digital assets.
Bitcoin, the world’s largest cryptocurrency, had surged to a record high of $109,071 on Monday during Trump’s swearing-in ceremony.
However, by 10:01 GMT on Tuesday, it had dropped to $102,546.13, still reflecting a 9.5% gain for the month of January.
The newly launched Trump-branded cryptocurrency also saw a steep decline. Initially priced at $6.50 during its Friday night launch, the token peaked at $75 on Monday, giving it a market valuation exceeding $14 billion.
However, it has since halved in value to $37.98, according to data from CoinMarketCap.
Crypto markets disappointed by policy silence
President Trump’s inaugural address focused on trade tariffs, energy deregulation, immigration policies, and a reprieve for TikTok, but the absence of any mention of cryptocurrencies left the digital asset market deflated.
According to Reuters’ report, Geoffrey Kendrick, Global Head of Digital Assets Research at Standard Chartered, expressed disappointment:
“The digital asset market is disappointed to not have been mentioned in the inauguration speech or day-one executive orders. I suspect Bitcoin will go lower in the absence of news from Trump on digital assets. A break below $100,000 seems inevitable.”
- For months, crypto investors had been optimistic about Trump’s crypto-friendly stance, expecting policies that could usher in a new era of regulatory leniency.
- Bitcoin’s rise above $100,000 in December 2024 was partly driven by these expectations.
The report also quoted Matthew Dibb, Chief Investment Officer at Astronaut Capital, who suggested the market may be experiencing a “sell-the-news” event:
“The market had great expectations about a bitcoin strategic reserve and relaxed regulations around digital assets. However, it seems more likely these developments will be gradual rather than immediate. Further volatility and likely a selloff are expected.”
Trump’s appointment
Despite the market’s initial disappointment, Trump has taken steps that could reshape the regulatory landscape for cryptocurrencies.
- He appointed Mark Uyeda, a Republican member of the U.S. Securities and Exchange Commission (SEC), as acting chair and announced plans to nominate former SEC Commissioner Paul Atkins for the permanent role.
- Atkins is widely regarded as a pro-crypto figure and is expected to reverse the regulatory crackdowns initiated under former President Joe Biden’s SEC Chair, Gary Gensler.
- Uyeda has also criticized the SEC for failing to provide clear guidance for crypto companies seeking to register with the regulator.
- Sources familiar with the matter suggest that the new SEC leadership could start overhauling cryptocurrency policies as early as next week.
Ethical concerns surrounding Trump-branded cryptos
Meanwhile, the launch of Trump’s $TRUMP token and $MELANIA token, named after the former first lady, has sparked ethical concerns and debates about potential conflicts of interest.
- Eighty per cent of the $TRUMP token is owned by CIC Digital, an affiliate of Trump’s business, and another entity called Fight, Fight, Fight. Both entities claim the tokens are not investments or securities but expressions of support for Trump’s ideals.
- World Liberty Financial, another Trump-linked crypto project, announced that it had raised $300 million through an initial token sale and plans to issue additional tokens.
- While Trump has pledged to transfer the management of his assets to his children, the launch of Trump-branded tokens raises questions about transparency and oversight, particularly given cryptocurrency’s ability to attract billions in speculative investments.