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As the interest generated by President-elect Donald Trump's support for the cryptocurrency industry starts to fade, a wave of selling has smashed the market. On Tuesday, Bitcoin experienced one of its largest daily declines of 2024, dropping below $95,000 at one point, while an index of smaller digital currencies decreased as much as 15%.
After the US election, investors rushed into cryptocurrency. They were inspired by Trump's debated support for a national Bitcoin deposit and his promise to establish a favorable regulatory environment. At the same time, investors are frequently seen quickly withdrawing their investments because of the hair-trigger fluctuation of digital assets.
Bitcoin Price Movements
On December 5, Bitcoin reached a record high of $103,800, but it later found it difficult to maintain its six-figure level. On the last day, the whole cryptocurrency market lost almost $150 billion.
Sean Farrell, head of digital-asset strategy, stated that recent activity indicates "reducing debt across the crypto industry." According to Farrell, one catalyst might be a delay ahead of Wednesday's US price data. This data might affect hopes for lower interest rates by the Federal Reserve.
Donald Trump’s Crypto Agenda
Trump appointed a new White House advisor for AI and crypto and appointed a fan of digital assets to lead the US financial regulator going forward. He was once doubtful of cryptocurrency, but he changed his mind after the sector heavily invested in advancing its goals during the election season.
Fans of digital assets should expect an increase when Trump changes a previous Biden regulation. According to critics, wider general acceptance of cryptocurrency has a number of concerns.
Since Trump was elected president, approximately $10 billion has rushed into US spot-bitcoin traded funds. In the meantime, MicroStrategy Inc. purchased a further $2.1 billion worth of the cryptocurrency.
According to Farrell, traders would see MicroStrategy's statements of previous deals as "automatically pulling quite large spot offers from the market."
Smaller coins like Dogecoin, a meme fan favorite, and Ether were mixed together. After Bitcoin failed to stay over $100,000, analytical expert Katie Stockton wrote a report suggesting a "neutral short-term bias."
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