The cryptocurrency market saw a modest rise on Friday, remaining below recent highs despite President Trump’s executive order establishing a working group to develop crypto regulations and explore the creation of a U.S. cryptocurrency reserve. This long-awaited move signals a potential shift in the regulatory landscape for digital assets.
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Bitcoin’s Response to Trump’s Presidency and Crypto Policies
Bitcoin has experienced significant volatility since Trump’s inauguration. Following his election victory in November, the world’s largest cryptocurrency surged 50%, breaking the $100,000 barrier and reaching new all-time highs. This rally was partly fueled by Trump’s campaign promises to overturn the previous administration’s stricter approach to the crypto industry and position himself as a “crypto president.”
While Bitcoin’s price initially reacted positively to Trump’s election, it has remained relatively stable since he took office on Monday, hovering around $106,000 on Friday. Some of the initial euphoria surrounding anticipated regulatory changes has subsided as investors await concrete details.
Executive Order: Key Provisions and Potential Impact
Trump’s executive order, issued on Thursday, declared the digital asset industry “crucial” to U.S. innovation. The order established a working group tasked with drafting new crypto regulations and investigating the feasibility of a national crypto stockpile. Concurrently, the Securities and Exchange Commission (SEC) rescinded accounting guidance that the crypto industry viewed as a major obstacle to wider adoption.
These measures, while lacking specific details, appear to have mitigated some of the disappointment stemming from the absence of crypto reform in Trump’s initial policy announcements. As of Friday afternoon, Bitcoin was up 2.8% at $106,048, while Ether, another prominent cryptocurrency, rose 4.1% to $3,383.
Market Uncertainty and Trump-Linked Crypto Ventures
Market analysts observe that the current price fluctuations reflect a degree of profit-taking and uncertainty surrounding the implementation of Trump’s crypto policies. While he appears committed to his campaign promises, the pace and extent of regulatory changes remain unclear.
Trump-affiliated crypto projects, including the $TRUMP meme coin and tokens issued by World Liberty Financial, have also experienced recent price declines. The $TRUMP token, launched last Friday, lost roughly half its value since peaking at $75 on Sunday, trading around $32.62 on Friday.
These ventures have drawn criticism, with prominent figures like Senator Elizabeth Warren raising ethical concerns and questioning their potential impact on Trump’s impartiality and investor protection. Warren’s letter to regulators highlights the potential risks associated with these coins. The White House has not yet responded to requests for comment, and Trump has previously stated his intention to transfer management of his assets to his children.
Long-Term Implications and Market Outlook
The executive order also mandates the protection of banking services for crypto companies and prohibits the development of central bank digital currencies (CBDCs) in the U.S., which could potentially compete with established cryptocurrencies like Bitcoin.
The newly formed working group has a July deadline to submit a report recommending regulatory adjustments and assessing the viability of a national digital asset reserve. Analysts suggest that Bitcoin’s price rally might pause until the policy implications become clearer. While the executive order generally aligns with Trump’s campaign pledges, the absence of concrete plans for a Bitcoin strategic reserve has left the market in a state of anticipation.
The long-term effects of Trump’s crypto policies remain to be seen. However, the executive order represents a significant step towards establishing a regulatory framework for digital assets in the U.S., potentially paving the way for wider adoption and integration into the mainstream financial system. The market’s response in the coming months will provide crucial insights into the direction of the crypto industry under the new administration.
