After Donald Trump's inauguration, $TRUMP, $Melania crypto tokens crash
Soon after Donald Trump's inauguration, Bitcoin and other digital assets, including the newly launched Trump-branded token lost their ground
Donald Trump's inauguration as US president has impacted the highly volatile cryptocurrency market which experienced a sharp pullback on Tuesday.
Bitcoin and other digital assets, including the newly launched Trump-branded token, witnessed a sharp decline.
Despite a promising start with Bitcoin reaching an all-time high of $109,071 on Monday, the world’s largest cryptocurrency retraced its steps and was last trading at $101,705.40, news agency Reuters reported.
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Similarly, the value of the newly launched meme coin, which is named after Trump, plummeted by nearly 50% – from a peak of $74.59 to $34.4.
Did Trump's inaugural speech play a part?
The sharp decline in the crypto market came right after Trump’s inaugural speech, which emphasised his plans for imposing trade tariffs and amending immigration policy, energy deregulation, and a reprieve for TikTok but lacked any mention of cryptocurrencies.
This absence has left many in the crypto market disappointed, as expectations had been high with the new Trump administration regarding digital assets.
"I think in the short term there's a chance this could be a sell-the-news event," said Matthew Dibb, chief investment officer at crypto asset manager Astronaut Capital, adding that crypto investors had been anticipating some executive actions to be rolled out during Trump's first day in office.
"The market has some great expectations about a bitcoin strategic reserve and a loosening of regulations around digital assets, but it's more likely these developments will be drip-fed over a series of months rather than days. Bitcoin has already retreated ... We are expecting further volatility here and likely a selloff," Dibb added.
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However, his administration had been widely anticipated to introduce significant regulatory changes or even lay the groundwork for a "Bitcoin strategic reserve" that could bolster the cryptocurrency’s legitimacy in the eyes of institutional investors.
Trump has tapped Mark Uyeda, a Republican member of the US Securities and Exchange Commission, to be acting chair of the agency and plans to nominate former SEC Commissioner Paul Atkins to run the agency permanently.
Atkins is widely expected to end a crypto crackdown led by former President Joe Biden's Democratic SEC chair Gary Gensler and Uyeda has criticised the SEC for failing to offer guidance on how crypto companies can register with the agency.
Trump might give a push to crypto, but ethics concerns remain
However, Trump’s involvement in the cryptocurrency market has raised concerns over potential conflicts of interest.
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Trump's launch of the $TRUMP token and the $MELANIA token, for First Lady Melania Trump, shortly before his inauguration creates new conflict-of-interest concerns, ethics experts and industry insiders said.
Eighty per cent of Trump coin's tokens are owned by CIC Digital, an affiliate of Trump's business, and another entity called Fight, Fight, Fight, according to its website.
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