Bitcoin hits US$109k before pulling back as US inauguration fuels hopes for crypto-friendly policies
Bitcoin hit a new all-time high early Monday but declined after the inauguration of US President Donald Trump, as reported by CNBC.
The cryptocurrency dropped more than 2 percent, trading at US$103,558.38 according to Coin Metrics. Earlier in the day, it reached a peak of US$109,350.72.
Market analysts describe the drop as a “buy the rumour, sell the news” scenario.
Bitcoin had gained momentum last week as traders anticipated the inauguration, which many in the cryptocurrency space view as symbolic of a shift toward more supportive US crypto regulation.
Speculation around Trump potentially announcing executive actions related to cryptocurrency further bolstered market sentiment. Rumours included the creation of a crypto advisory council and the establishment of a national Bitcoin reserve in the US.
Over the weekend, Trump launched the ‘Official Trump’ meme coin, which reached a market cap exceeding US$10bn by Monday morning, according to CoinGecko.
First Lady Melania Trump also introduced her own meme coin, ‘Melania,’ on Sunday. Trading volumes for the coins hit US$31bn and US$7.2bn, respectively, in the past 24 hours.
“Rumours that cryptocurrency may be declared a national interest by the United States during the inauguration are having a positive effect on the price of Bitcoin,” said Gracy Chen, CEO of crypto exchange Bitget, in a statement to CNBC.
Chen suggested that the Trump family meme coins diverted capital away from Bitcoin, capping its overall growth.
The broader crypto market saw declines, with the CoinDesk 20 index down 3.6 percent by Monday afternoon.
Solana led losses, dropping 9 percent following a 14 percent weekend rally tied to the Trump meme coin launch on its Ethereum alternative network.
Meme coins, often regarded as one of the riskiest segments of the crypto market, gained renewed attention due to the Trump family’s involvement.
Joel Kruger, market strategist at LMAX, said the launches signalled the administration’s potential support for the broader cryptocurrency space.
“There is a logic here that would suggest that putting a stamp of approval on what could be perceived as the wildest of crypto assets, meme coins, is the best way to send a message of just how supportive the market should expect the administration to be,” Kruger told CNBC.
Noelle Acheson, economist, and author of the Crypto is Macro Now newsletter, noted that the meme coin launches were a positive development and reflected openness to innovation.
Bitcoin’s record high has sparked projections of further price increases, with LMAX’s Kruger suggesting an upside extension to US$130,000 is possible.
