A heady combination of hope and disappointment has sent Bitcoin on a wild ride this week as cryptocurrency owners pin their hopes on the new Trump administration’s ability to boost the value of their holdings.
After reaching an all-time high of $109,000 early Monday morning, the price of Bitcoin fell 9% to $100,000 after the Trump administration failed to announce a major crypto policy change during his first full day in office. A document released by the Trump administration shortly after the inauguration outlining the president’s top priorities also omitted any mention of crypto or digital assets. And investors were further disappointed that a crypto-related executive order was not among the 26 Trump signed immediately following the inauguration.
“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 asset manager VanEck.
A missive from the administration did come, however, although slightly later than expected. On Tuesday the SEC, a federal agency in charge of regulating securities, announced the formation of a crypto task force, writing that the group will be “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.”
The price of Bitcoin has risen 3% in the last 24 hours, peaking at 107,000 on Tuesday, close to its Monday high.
While speculation is rampant about what actions Trump will take in the coming weeks to support the crypto industry, Sigel says it is likely that the new administration will repeal Biden-era policies that emphasize legal enforcement, including an executive order from March 2022 which encouraged the “ongoing scrutiny of the use of digital assets.”
As investors await more crypto-specific news, there is also talk of a number of other policy changes Trump could make, including designating crypto a “national priority,” creating a strategic Bitcoin reserve, and preventing the government from selling Bitcoin it acquired from criminal enterprises.