Bitcoin retreated from its record high as traders awaited crypto policy directives from US President Donald Trump following his inauguration.
No Executive Order for Crypto
The market had expected an executive order supporting the digital-asset sector, but it was absent from Trump’s first-day executive actions. Instead, Trump focused on issues such as immigration, trade, energy, and TikTok.
As of 12:31 p.m. Tuesday in Singapore, Bitcoin was trading around $102,400. The token had briefly hit a peak of $109,241 ahead of Trump’s swearing-in before pulling back. Most other digital assets followed a similar wavering trend.
Market’s Resilience Amid Uncertainty
Richard Galvin, co-founder of hedge fund DACM, suggested that it is too early to draw conclusions from the lack of an immediate executive order. “Markets have shown resilience, suggesting investors are taking a longer-term view,” he said.
Trump Tokens and Expectations
Before the inauguration, Trump and his wife Melania unveiled memecoins that caused a stir in the market. This move diverted some market flows, but many investors believed it signaled Trump’s willingness to embrace crypto-friendly policies.
Bloomberg News previously reported that Trump might consider issuing an executive order designating the digital-asset sector as a “national priority.” Once skeptical of Bitcoin, Trump became a supporter of the digital-assets industry during his campaign, even pledging to make the US the world’s crypto capital and proposing a strategic Bitcoin stockpile.
Despite the surprise that Trump did not issue a crypto-affirming executive order on day one, TD Cowen analyst Jaret Seiberg stated that “one should be forthcoming,” even though it might not be substantial.
Volatility of Memecoins
The Trump memecoin was trading at around $34, according to CoinMarketCap data. The token briefly achieved a market value of more than $15 billion on Sunday, before falling below $7 billion on Tuesday.
Memecoins, such as the Trump tokens, have been criticized by some industry executives for potentially making crypto appear frivolous. Others, like Ben El-Baz, managing director of HashKey Global, believe the tokens have accelerated Bitcoin’s momentum, especially as retail traders look for Trump’s administration to reinforce its commitment to the crypto industry.
Memecoins are highly volatile cryptocurrencies with dubious intrinsic value, often relying on social media trends to drive their prices. They can see significant fluctuations in value in a short period.
Trump Token Ownership and Longevity
The Trump token is predominantly owned by a Trump Organization affiliate called CIC Digital LLC and a related entity named Fight Fight Fight LLC, which controls 80% of the tokens. These holdings will be unlocked over three years.
The token’s website states that 200 million of the tokens are immediately available, with the total supply growing to 1 billion over the next three years. However, it also clarifies that the token is not intended to be an “investment opportunity, investment contract, or security of any type.”
Gautam Chhugani of Bernstein suggested that a memecoin tied to Trump’s brand and politics may have “potential longevity.” While some may find it off-putting, he believes this marks the start of a “new crypto regulatory era.”
Bitcoin’s Rally
Bitcoin has surged about 50% since Trump’s election victory in early November, leading to speculation about whether the rally will pause if expected presidential actions fail to excite investors. The crypto market remains in limbo, with traders waiting for clarity on future policy direction from the new administration.
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