A cartoon image of US President-elect Donald Trump with cryptocurrency symbols, pictured in front of the White House on the occasion of his inauguration, is displayed at the Coinhero store in Hong Kong, China, on Monday, January 20, 2025.
Paul Young | Bloomberg | Getty Images
Bitcoin Other cryptocurrencies retreated from their highs on Monday, as bullish investor sentiment surrounding cryptocurrencies slowed following the inauguration of President Donald Trump.
The “Official Trump” token, which was launched last week and represents the new US leader, fell by as much as 26% in 24 hours, according to CoinGecko data. Meanwhile, the price of a meme token issued by First Lady Melania Trump on Sunday nearly halved in one day.
Bitcoin was trading at around $104,375, according to Coin Metrics. This was off the lows of the previous 24 hours but below the high of $109,350.72 before Trump was sworn in. The broader cryptocurrency market, as measured by the CoinDesk 20 Index, is hovering below the flat line.
Cryptocurrency investors have hailed Trump’s arrival in the White House as a positive moment for the industry. The president has promised to introduce supportive policies for cryptocurrencies, including a favorable regulatory framework and a federal bitcoin reserve.
While Trump is seen as standing to benefit from cryptocurrencies, his inauguration on Monday lacks any concrete policy announcements regarding the sector. This appears to be the primary factor that took the wind out of the sails of the cryptocurrency market on Tuesday.
Kenneth Lamont, director of Morningstar, warned investors against jumping into cryptocurrency trading without being properly informed of the risks involved.
“If Donald Trump follows through on his campaign promises, we could see cryptocurrency markets continue to rise,” Lamont said in email comments on Tuesday. “However, investors are better off resisting the siren call for fear of missing out, and standing idly by.”
Cryptocurrencies are known to be volatile. Bitcoin, the world’s largest digital currency, has previously risen or fallen by thousands of dollars in a single day. Altcoins, or “altcoins,” such as Ethereum and XRP, have proven to be more vulnerable to volatility.
“Fear of missing out is not an investment strategy. For many investors, the lure of easy wealth is strong,” Lamont said, adding that retail investors “tend to be poor at timing the market, buying and selling at the worst moments.”