Authors: Tom Westbrook and Elizabeth Howcroft
SINGAPORE/PARIS (Reuters) – Other cryptocurrencies and even a newly minted token bearing Donald Trump’s name were cooled on Tuesday after the U.S. president’s first set of policies after his inauguration included no reference to the asset class.
Bitcoin, the world’s largest cryptocurrency, hit a record high of $109,071 on Monday when Trump was sworn in as the 47th US president, but then began to decline. At 10:01 GMT on Tuesday, it was trading at $102,546.13, still up about 9.5% this month.
Trump’s cryptocurrency, which launched on Friday evening at $37.98, has put its market value above $14 billion and is roughly halved from a peak of about $75 on Monday, according to cryptocurrency price tracker CoinMarketCap. At launch, the coin was priced at around $6.50.
Trump’s inaugural address on Monday was accompanied by a series of executive orders and plans on trade tariffs, immigration, energy deregulation and even the suspension of the popular Chinese short-video app TikTok. However, he did not mention cryptocurrencies.
“The digital asset market is disappointed that it was not mentioned in the opening speech or executive orders on day one,” said Geoffrey Kendrick, global head of digital asset research at Standard Chartered (OTC:).
“I suspect bitcoin will eventually decline until we hear any news from Trump on the digital asset. A return below $100,000 seems inevitable,” he said.
For months, hope has been building among cryptocurrency investors that a cryptocurrency-friendly president would usher in a radical change in U.S. policy toward the volatile asset class. The excitement helped Bitcoin surge above $100,000 for the first time in history last December.
“I think in the short term there is a chance this will be a news selling event,” said Matthew Dibb, chief investment officer at crypto asset manager Astronaut Capital, adding that cryptocurrency investors expected some enforcement action during Trump’s first day in office.
“The market has high expectations for the strategic bitcoin reserve and the relaxation of digital asset regulations, but it is more likely that this development will be drip-fed over several months rather than days. “Bitcoin has already pulled back…We expect further volatility and a sell-off likely,” Dibb said.
Funds traded on the cryptocurrency exchange were also sold out. The ChinaAMC Bitcoin ETF lost almost 6%.
But Trump has already set in motion personnel changes that the industry finds encouraging.
He named Mark Uyeda, a Republican member of the U.S. Securities and Exchange Commission, as acting chairman of the SEC and plans to name former SEC Commissioner Paul Atkins to permanently lead the regulator.
Atkins is widely expected to end the crackdown on cryptocurrencies under former President Joe Biden’s Democratic SEC chairman Gary Gensler, and Uyeda criticized the SEC for its lack of guidance on how crypto companies can register with the SEC.
Top Republican officials at the SEC are poised to begin a review of its cryptocurrency policy potentially as early as next week, three people briefed on the matter said.
CONFLICT OF INTEREST
Meanwhile, Trump’s launch of $TRUMP tokens and $MELANIA tokens for first lady Melania Trump shortly before his inauguration raises recent conflict of interest concerns, ethics experts and industry insiders say.
Eighty percent of Trump Coin tokens are owned by CIC Digital, an affiliate of Trump’s company, and another entity called Fight, Fight, Fight, according to the company’s website.
The companies said they are not investments or securities, but “an expression of support for and commitment to the ideals and beliefs embodied by the ‘$TRUMP’ symbol.”
World Liberty Financial, a separate Trump-linked crypto project, also announced on Monday that it had completed an initial token sale, raising $300 million, and intended to issue additional tokens.
Trump has pledged to hand over management of his assets to his children, but cryptocurrencies are of particular concern because of their ability to quickly attract billions of speculative dollars with little transparency.
