Bitcoin Gains After Initial Crypto Policy Disappointment, Analysts Warn of Volatility
NEW YORK/SINGAPORE/PARIS, Jan 21 (Reuters) – Bitcoin, the world’s largest cryptocurrency, saw a rise in value on Tuesday, approaching a previous record high amid fluctuating market conditions. This followed an initial wave of disappointment as the U.S. markets regulator unveiled plans to overhaul the rules for the digital asset sector.
Bitcoin prices increased 3.8%, while Ethereum, the second-largest cryptocurrency, gained 1.4%. This recovery occurred after an initial dip following the absence of cryptocurrency mentions during President Trump’s inauguration and early executive actions. Trump has expressed intentions to be a “crypto president.” Bitcoin had reached a record high of $109,071 on Monday, the day of Trump’s inauguration, but fell when crypto was not included in his initial policy announcements.
The Securities and Exchange Commission (SEC) announced on Tuesday the creation of a task force dedicated to developing a regulatory framework for digital assets. This marks the first significant step by the new administration to reshape the crypto policy landscape.
“The president has moved quickly on his agenda,” said Paul Grewal, Coinbase Chief Legal Officer, in a phone interview. “The SEC has made it clear they understand that and want to be a part of that.”
However, some analysts caution against expecting smooth sailing. They foresee potential market volatility until the Trump administration clarifies and implements concrete crypto policies, which the crypto industry has been eagerly anticipating.
Geoffrey Kendrick, global head of digital assets research at Standard Chartered, noted, “The digital asset market is disappointed to not have been mentioned in the inauguration speech or Day One executive orders.”
Some of Trump’s crypto-related ventures have also been criticized for potential conflicts of interest.
Acting SEC Chair Mark Uyeda’s office stated on Tuesday that the agency’s new task force aims to clarify regulatory boundaries, provide paths for registration, develop disclosure frameworks, and allocate enforcement resources.
Reuters had previously reported that Uyeda and Commissioner Hester Peirce were ready to initiate the crypto policy overhaul.
Trump is anticipated to issue executive orders in the coming days that will further promote Bitcoin adoption, according to reports from Reuters and other media outlets.
Jeremy Allaire, CEO of stablecoin issuer Circle, indicated at the Reuters Global Markets Forum at the World Economic Forum’s annual meeting in Davos that imminent executive orders could allow banks to trade crypto and offer crypto investments to wealthy clients and hold it in portfolios.
