Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve.
Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed.
Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420.
Photo: Reuters
Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and hit highs since Trump’s election victory in November last year, as he promised a bitcoin stockpile and a pro-crypto stance.
An executive order on Thursday, creating a digital assets working group, seemed to alleviate some disappointment that crypto reform did not feature in a flurry of policy announcements on his first day in office.
Titled “Strengthening American leadership in digital financial technology,” it ordered banking services for crypto companies be protected and banned the development of a US central bank digital currency.
The high-level working group has until July to deliver a report recommending regulatory changes and evaluating the potential to create a national digital asset stockpile.
“What we’re seeing is a little bit of profit taking in line with the uncertainty we’re seeing from Trump now,” said Nick Twidale, chief market analyst at ATFX Global in Sydney. “He’s not renegging on some of his promises, but they’re probably not going to come through as hard and fast.”
Trump’s executive order revoked a 2022 order by then-US president Joe Biden that encouraged regulators such as the US Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission to issue guidance and address risks in the crypto ecosystem.
The SEC also on Thursday rescinded some accounting guidance that had made it expensive for companies to safeguard crypto on behalf of third parties, something the industry had lobbied for.
Crypto executives toasted the incoming administration at a sold-out black-tie ball a week ago, featuring McDonald’s burgers and emceed by Trump’s crypto czar David Sacks, but analysts have said bitcoin’s price gains might take a breather for a while.
Trump-linked crypto ventures, including a meme coin known as $TRUMP and tokens issued by World Liberty Financial, have come off highs in recent days and raised concerns among ethics experts and market participants about conflicts of interest.
“Clear policy moves in support of digital assets — such as an executive order on a bitcoin reserve or deregulation, or a decisive statement that tariffs will not be imposed — would be needed to boost prices, in our view,” said Geoff Kendrick, global head of digital assets research at Standard Chartered.
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