Crypto markets lose steam after Trump's first policy move
2025-01-24
Category: None

        Crypto markets steadied on Friday, still holding below recent highs even after President Donald Trump ordered the creation of a new working group, tasked with proposing new crypto rules and exploring the possibility of a U.S. cryptocurrency stockpile.  
Bitcoin BTCUSD has been broadly steady since Trump took office on Monday and traded around $105,000 on Friday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed.
Bitcoin had been one of the most spectacular "Trump trades" in financial markets, gaining 50% to break above $100,000 and hit highs since Trump's election victory in November, as he promised a bitcoin stockpile and a pro-crypto stance.
An executive order on Thursday, creating a digital assets working group seemed to alleviate some disappointment that crypto reform didn't feature in a flurry of policy announcements on his first day in office, though it was light on detail.
    At 1418 GMT, bitcoin was up 1.9% on the day at $105,128 BTCUSD and smaller cryptocurrency ether was up 4.4% at $3,389 (ETH=).  
"What we're seeing is a little bit of profit taking in line with the uncertainty we're seeing from Trump now," said Nick Twidale, chief market analyst at ATFX Global in Sydney.
"He's not reneging on some of his promises, but they're probably not going to come through as hard and fast."
$TRUMP TOKEN
        Trump-linked crypto ventures, including a meme coin known as $TRUMP and tokens issued by World Liberty Financial, have come off highs in recent days and raised concerns among ethics experts and market participants about conflicts of interest.    
The $TRUMP token, which Trump launched last Friday, was trading at around $33.76, according to CoinMarketCap, having lost about half its value since its peak around $75 Sunday. It had traded below $10 early on Sunday.
       Two Democratic lawmakers, Senator Elizabeth Warren and Representative Jake Auchincloss, asked U.S. regulators to answer questions about the $TRUMP and $MELANIA cryptocurrencies launched by the president and his wife. Among accusations made in the letter, they said that the tokens "allow them to earn extraordinary profits off his Presidency".  
    "$TRUMP and $MELANIA present grave risks to President Trump’s ability to impartially govern our nation—and to investors in these coins, who may be made victims of a rug pull scheme orchestrated by the Trump family," the lawmakers said in a letter addressed to the U.S. Office of Government Ethics, the U.S. Treasury Department, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).  
    The White House did not immediately respond to a Reuters request for comment sent via email.  
     The meme coins have created new conflict-of-interest     concerns    , ethics experts said this week. Trump has pledged to hand management of his assets to his children.  
EXECUTIVE ORDER
    Thursday's crypto executive order, titled "Strengthening American leadership in digital financial technology," ordered banking services for crypto companies be protected and banned the development of a U.S. central bank digital currency but was otherwise vague.
The high-level working group has until July to deliver a report recommending regulatory changes and evaluating the potential to create a national digital asset stockpile.
Trump's executive order revoked a 2022 Joe Biden order that encouraged regulators such as the SEC and the CFTC to issue guidance and address risks in the crypto ecosystem.
The SEC on Thursday rescinded some accounting guidance that had made it expensive for companies to safeguard crypto on behalf of third parties, something the industry had lobbied for.
Crypto executives toasted the incoming administration at a sold-out black-tie ball a week ago. Analysts say bitcoin's price gains might take a breather for a while.
"Clear policy moves in support of digital assets – such as an executive order on a bitcoin reserve or deregulation, or a decisive statement that tariffs will not be imposed – would be needed to boost prices, in our view," said Geoff Kendrick, global head of digital assets research at Standard Chartered.