**Market Update: Cryptocurrencies React Following Inauguration Speech**

*By Forex News Team*

SINGAPORE (Reuters) – Volatility swept through the cryptocurrency market on Tuesday as Bitcoin and other digital assets retraced some of their recent gains. The declines followed the inauguration speech of U.S. President Donald Trump, which notably omitted any mention of cryptocurrencies—a disappointment for many investors who had hoped for potential policy shifts that could benefit the sector.

Bitcoin, the leading cryptocurrency by market capitalization, reached an all-time high of $109,071 on the day of Trump’s inauguration, sparking enthusiasm among traders. However, it subsequently pulled back and was last seen trading around $101,705.40, highlighting the market’s sensitive reaction to news and sentiment.

The newly launched Trump-branded meme coin began trading strongly but faced significant selling pressure as well. After peaking at $74.59 on Monday, with a market value exceeding $14 billion, it tumbled to $34.4 as traders booked profits, representing a nearly 54% decline from its peak.

Trump’s inaugural address was characterized by a series of broader economic and regulatory initiatives, including measures concerning trade tariffs and energy deregulation. However, the absence of direct commentary on cryptocurrencies left many industry participants feeling underwhelmed. Matthew Dibb, Chief Investment Officer at crypto asset manager Astronaut Capital, remarked, “It appears that some of the optimistic expectations for immediate regulatory changes may have been overestimated, suggesting a potential sell-the-news reaction.”

With Bitcoin’s recent performance, market analysts are cautioning traders to brace for further volatility. Dibb anticipates that any significant developments regarding cryptocurrency regulation will likely unfold gradually over the coming months rather than in days.

In parallel, the cryptocurrency exchange-traded funds (ETFs) experienced declines, such as the ChinaAMC bitcoin ETF, which fell nearly 6%.

Despite the rocky start, there are signs of potential positive shifts on the horizon. Trump’s recent appointments at the U.S. Securities and Exchange Commission (SEC) may pave the way for a more favorable regulatory landscape for cryptocurrencies. Among these changes, Mark Uyeda has been appointed acting chair, and former SEC Commissioner Paul Atkins is expected to lead the agency permanently. Atkins has been perceived favorably by the crypto community due to his past criticism of the SEC’s stringent approach under former President Biden.

In a separate development, the launch of the $TRUMP token and the $MELANIA token just before the inauguration has sparked ethical concerns. Industry analysts have raised flags about potential conflicts of interest, as a significant portion of the tokens is controlled by CIC Digital, linked to Trump’s business interests. While the companies involved argue that these tokens do not represent securities, the rapid influx of speculative capital poses transparency challenges.

As the cryptocurrency landscape evolves, forex traders should remain vigilant and closely monitor regulatory developments and market sentiment. Expectations for a shift in U.S. policy regarding digital assets may continue to influence volatility in this burgeoning asset class.

For traders looking to navigate this dynamic market, it is crucial to stay informed on both domestic political developments and broader market trends impacting cryptocurrencies.

Image from CoinTribune, licensed under CC BY 4.0.