Bitcoin Retreats Amid Market Volatility Post-Trump Inauguration
Bitcoin's record rally encountered a setback amidst heightened fluctuations within crypto markets following Donald Trump's inauguration as the 47th US president.
Amidst anticipations of pro-cryptocurrency executive orders from Trump, Bitcoin's value reached a peak of $109,241, but later dipped to approximately $103,700. Market participants reacted with disappointment to Trump's inaugural address, which lacked specific commitments to Bitcoin.
"Cryptocurrency markets are disappointed by the absence of concrete promises on Bitcoin in President Trump's inaugural address," said Matt Hougan, Chief Investment Officer at Bitwise Asset Management.
Prior to the inauguration, Trump and his wife unveiled memecoins, which caused market volatility by diverting attention and capital. Investors initially saw this as an incentive for Trump to adopt crypto-friendly policies.
Bloomberg News reported that Trump may consider an executive order classifying cryptocurrencies as a "national priority." During his campaign, Trump transitioned from skepticism to enthusiasm for the digital asset industry, advocating for a "crypto capital" in the US and a strategic Bitcoin stockpile.
Beyond Bitcoin, the crypto market exhibited mixed performance, with Ether and XRP gaining ground. The Trump memecoin traded at around $40, with a peak market valuation of $15 billion on Sunday, before experiencing a correction.
Industry veterans expressed mixed reactions to the memecoins. Some voiced concerns about the potential to trivialize cryptocurrencies, while others believed it accelerated Bitcoin's momentum by signaling Trump's commitment to the cryptosphere.
Memecoins have limited intrinsic value and high volatility, relying on social media trends to drive their value.
The Trump token is held by CIC Digital LLC, an affiliate of the Trump Organization, with 80% ownership. The token supply will gradually unlock over three years.
"Memecoins leverage Trump's brand and politics, indicating potential longevity," said Gautam Chhugani of Bernstein.
Despite reservations, Chhugani sees it as the beginning of a "new crypto regulatory era."
Major exchanges such as Binance and Coinbase declared their intentions to list the token, while Robinhood Markets Inc. announced its listing on Monday.
Jonathan Yark, senior quantitative trader at Acheron Trading, emphasized that the memecoin "demonstrates the backing of the US for digital assets, Bitcoin in particular, presenting significant opportunities."