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As traders evaluate the remaining economic impact of the new president, Donald Trump's verbal support for cryptocurrency, an increase in Bitcoin prices has stopped. Excitement for a Donald Trump administration now seems to be fading. The attention shifted to incoming US inflation data for more clues, and Bitcoin dropped from its record peaks on Wednesday.
According to data collated by Bloomberg, the digital asset has increased by around 30% since Trump's election victory on November 5 and reached a record of $89,968 on Tuesday, as of Wednesday morning at 6:30 a.m. London time, the token dropped back to $86,550.
Trump’s Point of View Regarding Crypto
Trump has promised to establish a strategic Bitcoin stockpile. He promised to provide a friendly regulatory environment for cryptocurrencies and establish the US as the world's center for this industry. Trump changed his mind after spending a lot of money during the election campaign to advance the interests of digital asset firms.
His position gave hope to the cryptocurrency community, pushing the market's value to an all-time high. Regarding the economy, it is generally anticipated that Trump is going to pursue more extreme measures, which may eventually support interest rates and inflation.
Dogecoin
Dogecoin (DOGE-USD), a cryptocurrency token supported by entrepreneur Elon Musk, has been one of the best-performing recently. Over the last five days, DOGE, the coin with a Shiba Inu motif, has increased by over 80%.
In an apparent reference to the cryptocurrency, Musk proposed before the election that he might head a Department of Government Efficiency. Following an almost 100% increase since Trump's election victory, Dogecoin dropped 8.3% to $0.355270.
Following Trump's confirmation that Musk and Ramaswamy will head the DOGE agency. The token experienced a surge in profit-taking. According to Trump, the agency would operate independently and seek to cut back on government expenditure, "unnecessary regulations," and bureaucracy.
Greater Yields
The dollar and Treasury rates are rising. It is a sign that investors expect higher prices from Trump's proposed tax cuts and trade penalties. Stocks dropped because higher borrowing costs can make risky investments like cryptocurrency less attractive.
As stated by Noelle Acheson, creator of the Crypto Is Macro Now newsletter, a rapid drop is less likely when the pressure in the crypto market is relatively muted. He further added that a market break would be beneficial, but it surely won't last long. Strong backing for growth is still present.
On Tuesday, Bitcoin momentarily surpassed $90,000 on a few trading platforms, including Coinbase Global Inc.'s (COIN) platform. Deribit data shows that traders are betting on the top cryptocurrency, which is $100,000. At the start of the week, more than $1 billion flowed into US Bitcoin exchange-traded funds.
