Bitcoin, the largest cryptocurrency by market capitalization, reached a record high of $109,071 on Monday as Trump was sworn in as the 47th U.S. president. However, those gains quickly reversed, with the cryptocurrency trading at $102,100.0 by 04:27 ET (09:27 GMT) on Tuesday.
The Trump-themed meme coin, $TRUMP, launched just days earlier on Friday, also saw a sharp drop. Priced at $6.5 at launch, it surged to a peak of $74.59 on Monday, giving it a valuation of over $14 billion. At the time of writing on Tuesday, the coin was trading at $40.20, according to CoinGecko.
In his inaugural speech, Trump outlined various executive actions on trade tariffs, immigration, energy deregulation, and even issued a reprieve for TikTok. Yet, cryptocurrencies went unmentioned, disappointing industry stakeholders who had hoped for significant policy shifts under the crypto-friendly president.
“I think in the short term there’s a chance this could be a sell-the-news event,” said Matthew Dibb, chief investment officer at Astronaut Capital. He noted that many investors had anticipated immediate executive actions addressing digital assets.
“The market has some great expectations about a bitcoin strategic reserve and a loosening of regulations around digital assets, but it’s more likely these developments will be drip-fed over a series of months rather than days. Bitcoin has already retreated … We are expecting further volatility here and likely a selloff,” Dibb added.
The crypto exchange-traded funds (ETFs) also felt the pressure, with the ChinaAMC Bitcoin ETF (HK:83042) dropping more than 5%.
Despite the lack of immediate action on cryptocurrencies, Trump’s early personnel moves offered some hope for the industry.
Mark Uyeda, a Republican member of the SEC, was named acting chair of the agency, with Trump planning to nominate former SEC Commissioner Paul Atkins for the permanent role.
Atkins is expected to roll back the crypto crackdown initiated under Gary Gensler, Biden’s Democratic SEC chair. Uyeda has also criticized the agency for failing to provide clear guidance for crypto firms.
Republican SEC officials are reportedly preparing to overhaul the agency’s cryptocurrency policies, with changes potentially coming as soon as next week, Reuters said in a report, citing sources familiar with the matter.
Meanwhile, Trump’s launch of the $TRUMP token and First Lady Melania Trump’s $MELANIA token before his inauguration has raised conflict-of-interest concerns, Reuters said, citing ethics experts.
Eighty percent of $TRUMP tokens are owned by CIC Digital, an affiliate of Trump’s business, and another entity called Fight, Fight, Fight. The companies claim the tokens are not investments but an “expression of support for, and engagement with, the ideals and beliefs embodied by the symbol ‘$TRUMP’.”
Separately, World Liberty Financial, another Trump-linked crypto project, raised $300 million through an initial token sale.
Trump has promised to transfer the management of his assets to his children, but the crypto asset is drawing significant scrutiny for its potential to rapidly generate billions in speculative investments with minimal transparency.
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