Crypto markets and Bitcoin have been resilient since Donald Trump became president on Monday. The largest cryptocurrency in the world, Bitcoin, hit a new high of $109,071 and was trading near $106,000 on Friday. This stability follows as enthusiasm over possible regulatory adjustments starts to subside.
Bitcoin held its ground on Friday, even with the formation of a new working group to draw up cryptocurrency regulations by President Trump. The working group will discuss a U.S. cryptocurrency stockpile as well. Yet still, the market hasn’t yet rebounded back to recent peaks.
Bitcoin has been among the most high-profile “Trump trades,” rising 50% since Trump’s presidential win last November. Trump promised to roll back the Biden administration’s hard line against crypto, and his administration is now acting to make that promise reality.
New regulations for Crypto:
In a Thursday executive order, Trump termed the digital asset market as “crucial” to U.S. innovation. He formed a working group which will draw up new regulations and explore the feasibility of a national crypto hoard. Concomitantly with this, the Securities and Exchange Commission (SEC) removed accounting guidance previously dampening crypto adoption.
These efforts generated some cheer in the market, even as they lacked detail. At 1714 GMT, Bitcoin traded 2.8% higher on the day at $106,048, while smaller cousin ether rose 4.1% to $3,383.
Market experts point to a trend of profit-taking, demonstrating skepticism over Trump’s commitments. Nick Twidale, the chief market analyst at ATFX Global, remarked that although Trump is not backtracking on his promises, the speed of change may not be as swift as anticipated.
$Trump token:
At the same time, Trump-branded crypto projects have not fared well. The $TRUMP token, a meme coin that was released last Friday, lost its value from approximately $75 to about $32.62, decreasing by almost half its value. Critics such as Senator Elizabeth Warren have questioned the ethics of these tokens.
Trump’s executive order also seeks to safeguard banking services for crypto businesses and prohibits the development of U.S. central bank digital currencies, which might be a source of competition to existing cryptocurrencies such as Bitcoin. The working group has until July to submit proposals on regulatory updates and evaluate the viability of a digital asset reserve.
While Trump’s executive order goes a long way to addressing his campaign promises, the lack of an explicit plan for a Bitcoin reserve leaves the market wary as it enters the weekend.
