Bitcoin’s value drops as cryptocurrency enthusiasts left disappointed by Trump’s announcements
Bitcoin faced a significant downturn following its record high of $109,114.88 on the day of President Trump’s inauguration. The cryptocurrency plummeted by 23.3 percent since then, hitting a low of $83,741.94 during recent trading sessions. Although it has slightly recovered to over $84,000, Bitcoin’s volatility has sparked concerns among investors.
The broader crypto market has also experienced a rout, with over $800 billion in nominal value wiped out in recent weeks. This downturn comes after a surge in enthusiasm within the industry following Trump’s election victory in the previous year. Bitcoin had reached a then-record high of $89,623 in November and surpassed $100,000 in early December, fueled by optimism surrounding Trump’s crypto-friendly policies.
Trump’s initial support for the crypto industry, including rescinding a 2022 accounting rule that hindered banks from recognizing Bitcoin and other tokens as assets, further buoyed market expectations. However, as time passed, crypto enthusiasts grew disillusioned, as Trump’s actions did not match their high hopes for substantial market boosts.
The launch of Trump’s own memecoin, ‘$Trump’, and similar ventures by other political figures failed to sustain market confidence. The decline in memecoin values, coupled with security concerns following a recent $1.5 billion Ethereum theft, contributed to the overall slump in digital token prices.
In response to these challenges, Trump proposed establishing a “national digital asset stockpile” to manage cryptocurrencies seized by the US government. While this move indicated a less aggressive stance by regulators under Trump, investors had already factored in their expectations, leading to limited impact on crypto prices.
The disappointment among investors resonates with Sean McNulty, Head of APAC Derivatives at FalconX, who remarked, “Even though the market got 90 percent of what it wanted with the executive orders, it evidently was mostly priced in.” The anticipation for a stockpile plan to boost the market did not materialize, contributing to the prevailing unease among crypto investors.
Despite the initial optimism surrounding Trump’s presidency, the reality fell short of expectations, triggering a gradual decline in crypto prices in recent weeks. As the market recalibrates its outlook on the future of cryptocurrencies under the new administration, investors remain cautious amid ongoing volatility and regulatory uncertainties.
