BITCOIN retreated from a record high amid heightened swings in crypto markets around Donald Trump’s inauguration as the 47th US president.
Traders anticipate pro-crypto policy directions from Trump as part of a blitz of executive orders. The largest digital asset changed hands at about US$103,700 as at 4:25 pm on Monday (Jan 20) in New York, down from an earlier peak of US$109,241.
“Crypto is upset that President Trump didn’t promise something specific on Bitcoin in the inaugural address,” said Matt Hougan, chief investment officer at Bitwise Asset Management. “My advice: read that sentence again. We’re at the point where we expect Presidential inaugural speeches to reference Bitcoin.”
Ahead of his swearing in, Trump and his wife Melania unveiled memecoins that whipsawed the market by diverting flows. Investors later embraced the notion that the move further incentivises Trump to embrace crypto-friendly policies.
Crypto capital
Bloomberg News previously reported that Trump is considering an executive order designating the asset class a “national priority”. Trump became an ardent supporter of the digital-assets industry on the campaign trail, after once having branded Bitcoin a scam. He has pledged to make the US the world’s crypto capital and backed the idea of creating a strategic Bitcoin stockpile.
The wider crypto market beyond Bitcoin was mixed, including gains for the likes of Ether and XRP. The Trump memecoin traded at about US$40, according to figures from aggregator CoinMarketCap, having hit an overall market value of more than US$15 billion on Sunday before declining sharply.
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The Trump and Melania memecoins drew criticism from some industry executives, partly on the worry that they risk making crypto look frivolous.
Others took a different view. Ben El-Baz, managing director of HashKey Global, said the tokens debuted by the Republican and his team have further accelerated Bitcoin’s momentum, as retail traders look for his administration to “prioritise and reaffirm his commitment to the crypto industry”.
Memecoins are a kind of cryptocurrency with questionable intrinsic value and high volatility. They rely on social media tailwinds to drive up their price and can slide as quickly as they climb.
Trump token
An 80 per cent share of the Trump token is owned by a Trump Organization affiliate called CIC Digital, and a related entity called Fight Fight Fight – whose name echoes the words Trump mouthed after a bullet grazed his ear during the campaign trail. Their holdings will be unlocked over a three-year period.
To Gautam Chhugani of Bernstein, a meme coin “capitalising on Trump’s brand and politics, has potential longevity”. And while some may “cringe”, he adds that this marks the start of a “new crypto regulatory era”.
According to the website, 200 million of the tokens immediately became available, a supply that will grow to one billion over three years.
The small print on the website states the token is not intended to be an “investment opportunity, investment contract, or security of any type”. Major exchanges such as Coinbase Global and Binance Holdings nonetheless said during the weekend that they intended to list the token on their platforms. Robinhood Markets announced on Monday that it too had listed the token.
Jonathan Yark, sa enior quantitative trader at crypto market maker Acheron Trading, said the memecoin “confirmed that digital assets and, most importantly, Bitcoin will have the backing of the US which presents a significant opportunity”. BLOOMBERG