Bitcoin reached a historic high yesterday as Donald Trump was sworn in as the 47th President of the United States. The cryptocurrency surged to an unprecedented $109,071 in the hours
leading up to his inauguration, marking a major milestone for digital assets.
In a bold move further cementing his support for cryptocurrencies, Trump and his wife, Melania, launched their own digital tokens. The President’s “meme coin,” $TRUMP, quickly soared in value, with the 200 million tokens in circulation peaking at a valuation of £12 billion before retreating. The remaining 800 million $TRUMP coins are slated for release over the next three years, which, at their peak valuation, would give the token a market cap of £60 billion.
Meanwhile, the U.S. dollar fell sharply after an official confirmed that Trump would not implement new trade tariffs on his first day in office. This news boosted the pound by more than 1%, lifting it above $1.23.
Bitcoin surges on pro-crypto policies
Trump’s pro-crypto stance, which played a significant role in his campaign, has fueled optimism among investors. Having previously opposed digital currencies, Trump became the first presidential candidate to accept cryptocurrency donations. His family also established a crypto-focused company, World Liberty Financial, during his campaign.
Trump’s administration has proposed a range of initiatives to integrate cryptocurrencies into the financial system. These include plans to build a U.S. Bitcoin reserve, create a cryptocurrency advisory council, and reduce regulatory hurdles to mainstream adoption.
However, experts caution that the implementation of these policies will be critical. Any delays or changes could trigger significant volatility. "The devil will be in the details," noted Russ Mould, investment director at AJ Bell. Kathleen Brooks, research director at XTB, warned that crypto’s notorious volatility could lead to sharp declines if expectations aren't met.
Trump's tokens spark investor frenzy
Trump’s $TRUMP coin saw its value skyrocket from under £8 on Saturday to £60.70 by Monday, representing a £12 billion valuation. Similarly, the First Lady’s $MELANIA coin, launched on Sunday, reached a market cap exceeding £1 billion.
Simon Peters, an analyst at eToro, described the inauguration as triggering a "buying frenzy among crypto investors," while Susannah Streeter of Hargreaves Lansdown highlighted the growing expectations for clearer regulations and broader acceptance of digital currencies. However, she cautioned that the asset remains highly volatile and susceptible to sharp corrections.
Global implications of Trump's policies
At the World Economic Forum in Davos, business leaders expressed cautious optimism about Trump’s leadership despite fears of a potential trade war. Trump’s proposed tariffs—10% on global imports, 60% on Chinese goods, and 25% on Canadian and Mexican products—have raised concerns among global markets.
Marco Amitrano of PwC emphasized the importance of stability, stating, “British businesses are good at adapting to challenges. Knowing what we’re dealing with starts today.” Sir Martin Sorrell, CEO of S4 Capital, added that Trump’s focus on Europe’s defense spending was a “valid point.”
Market performance and investor outlook
Despite U.S. markets being closed for Martin Luther King Day, the FTSE 100 in London closed at a record 8,520.54, reflecting broader optimism among investors. Analysts are now closely watching how Trump’s pro-crypto policies unfold and their potential impact on market dynamics.
For now, Bitcoin’s unprecedented rally and the launch of Trump’s digital tokens have fueled speculation about the growing mainstream acceptance of cryptocurrencies. Yet, as experts warn, the road ahead remains unpredictable, with the potential for significant highs and lows. Photo by Jorge Franganillo, Wikimedia commons.