Bitcoin investors experienced a rollercoaster ride this week as the world’s leading cryptocurrency soared to a record high before experiencing a sharp decline. The volatility was fueled by speculation over how Donald Trump’s new administration would handle digital assets.
On Monday, hours before Trump’s inauguration, Bitcoin surged to an all-time high of $109,000 as traders bet on potential pro-crypto policies. However, that optimism quickly faded when the administration failed to announce any significant regulatory changes on its first full day in office. By the end of the day, Bitcoin had tumbled 9% to settle at $100,000.
Market Reacts to Trump’s Crypto Silence
Investors had been hoping for a strong signal from the new administration regarding cryptocurrency policy. However, a post-inauguration document outlining Trump’s top priorities made no mention of crypto or digital assets. Additionally, the absence of any crypto-related executive orders among the 26 that Trump signed immediately after taking office further dampened market sentiment.
“There was probably some hope that crypto-related executive orders would be part of Trump’s first slew of actions,” said Matthew Sigel, head of digital assets research at VanEck.
The lack of immediate action sent shockwaves through the market, prompting a sell-off that erased billions in Bitcoin’s value within hours.
SEC Announces Crypto Task Force Amid Market Uncertainty
Despite the initial disappointment, crypto investors received a glimmer of hope on Tuesday when the U.S. Securities and Exchange Commission (SEC) announced the formation of a crypto task force. The SEC stated that this new group would be “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.”
Following the SEC’s announcement, Bitcoin’s price partially recovered, climbing 3% to reach $107,000, just shy of its Monday peak.
While the details of the SEC’s new initiative remain unclear, traders are cautiously optimistic that it could pave the way for more structured and predictable regulations.
What’s Next for Crypto Under Trump?
With investors eagerly awaiting clearer policy direction, speculation is growing over the potential steps Trump could take to support the crypto industry. Analysts suggest that the new administration may look to repeal Biden-era policies that emphasized strict regulatory oversight and legal enforcement.
Sigel believes one of the first moves could involve rolling back Biden’s March 2022 executive order, which prioritized monitoring and controlling the use of digital assets.
Beyond regulation, there is also discussion about broader strategic measures the administration could consider, including:
- Designating crypto as a national priority
- Creating a U.S. strategic Bitcoin reserve
- Preventing the government from liquidating Bitcoin seized from criminal enterprises
For now, investors remain on edge, closely watching for any policy changes that could significantly impact the crypto landscape. With Bitcoin’s price still hovering near record highs, the market is bracing for further volatility in the coming weeks.