Trump-Branded Cryptocurrencies Fall Amidst Policy Silence
Singapore (Reuters) - Bitcoin (BTC-USD) and the nascent Trump-branded token witnessed declines alongside other cryptocurrencies on Tuesday, following President Donald Trump's inaugural policies that omitted any mention of the asset class.
Bitcoin, the world's preeminent cryptocurrency, surged to an all-time high of $109,071 on Monday during Trump's inauguration as the 47th US President. However, it subsequently relinquished gains, trading at $101,705.40 as of writing.
The Trump-themed meme coin, launched Friday night, last traded at $34.4, according to CoinGecko. This represents a 50% drop from its peak of $74.59 on Monday, when its valuation exceeded $14 billion. The coin debuted at around $6.5.
Trump's inaugural address on Monday focused on various executive orders and plans related to trade tariffs, immigration, energy deregulation, and a reprieve for TikTok. However, he made no mention of cryptocurrencies, disappointing an industry that had anticipated favorable policies from the purportedly crypto-friendly President.
"Short-term, this could be a sell-the-news event," said Matthew Dibb, Chief Investment Officer at Astronaut Capital. He noted that crypto investors expected executive actions related to cryptocurrencies on Trump's first day in office.
"The market anticipates a bitcoin strategic reserve and relaxed regulations on digital assets; however, these developments may be gradual rather than immediate. Bitcoin has already corrected, and we expect further volatility and potential sell-offs," added Dibb.
Crypto exchange-traded funds also experienced sell-offs, with the ChinaAMC bitcoin ETF shedding nearly 6%.
Despite the policy omission, Trump has initiated personnel changes seen positively by the industry. He has appointed Mark Uyeda to serve as acting chair of the Securities and Exchange Commission (SEC) and intends to nominate former SEC Commissioner Paul Atkins to lead the agency permanently. Atkins is expected to reverse the crypto crackdown initiated by former SEC Chair Gary Gensler under President Joe Biden, while Uyeda has criticized the SEC for failing to provide clear guidance on crypto company registration.
Top Republican officials at the SEC are expected to commence a review of the agency's cryptocurrency policies as early as next week.
Conflict of Interest Concerns
Meanwhile, concerns have been raised regarding a potential conflict of interest stemming from Trump's launch of $TRUMP and $MELANIA tokens featuring his wife, shortly before his inauguration. Experts and industry insiders point out that 80% of the Trump coin tokens belong to CIC Digital, a Trump business affiliate, and Fight, Fight, Fight, as per its website. The entities have emphasized that these tokens are not investments or securities but rather "expressions of support for the ideals embodied by '$TRUMP'".
World Liberty Financial, another Trump-linked crypto venture, also announced securing $300 million in an initial token sale on Monday, with plans for additional token issuances. Although Trump has vowed to transfer control of his assets to his children, the crypto asset raises concerns due to its potential for attracting speculative funds with limited transparency.