Crypto Market Pauses as Traders Assess Trump’s Impact
The recent surge in Bitcoin has come to a halt as investors evaluate the lasting effects of President-elect Donald Trump’s vocal support for cryptocurrency. Since Trump’s election victory on November 5, the digital asset has seen a significant 30% increase, reaching a record high of $89,968 on Tuesday.
Regulatory Framework and Industry Hub
Trump has pledged to create a favorable regulatory environment for crypto, establish a strategic Bitcoin reserve, and make the US a global hub for the industry. This shift in stance, from a former crypto skeptic, has instilled optimism across the crypto market, driving its value to an all-time high.
Thorny Questions Remain
However, uncertainty lingers about whether Trump and his Republican lawmakers will prioritize larger issues, such as China policy and the US economy, over digital-asset legislation. This could push crypto-related reforms down the list of priorities.
Market Analysts Weigh In
“While we wouldn’t rule out further gains, a lot of good news is already priced in,” notes Tony Sycamore, Market Analyst at IG Australia Pty. Noelle Acheson, author of the Crypto Is Macro Now newsletter, adds that “relatively muted” leverage in the crypto market reduces the risk of a sharp correction, and a market breather would be welcome, but likely short-lived.
Dogecoin Soars
Dogecoin, a token promoted by billionaire Elon Musk and favored by the meme crowd, has seen an impressive 80% increase over the past five days. The Shiba Inu-themed coin briefly surged after Trump announced the creation of a Department of Government Efficiency, with Musk as its co-head.
Global Market Focus Shifts
As attention turns to upcoming US inflation data, investors are reassessing their views on the Federal Reserve’s scope for further interest-rate cuts. Higher Treasury yields and a strengthening dollar suggest investors expect inflationary pressures from Trump’s trade tariffs and tax cuts.
Crypto Market Breather
Stocks have dipped in response, as higher borrowing costs could hinder riskier investments, including crypto. Despite this, bullish options bets are concentrated on Bitcoin reaching $100,000, and inflows into US Bitcoin exchange-traded funds have topped $1 billion. The crypto market may be due for a breather, but strong tailwinds are likely to drive it forward soon.
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