Cryptocurrency markets showed slight gains on Friday, remaining below recent peaks despite President Donald Trump's directive to establish regulations long awaited by the industry and consider forming a U.S. cryptocurrency reserve. Bitcoin had maintained stability since Trump's inauguration, driving it to a new high of $109,071. By Friday, it was trading around $106,000 as excitement over potential regulatory changes subsided. Since Trump's election victory in November, Bitcoin had been a standout performer, surging 50% and reaching new records.
In an executive order on Thursday, Trump emphasized the importance of the digital asset sector for American innovation. He announced the formation of a regulatory task force and exploration of a crypto reserve, aiming to address issues that had hindered cryptocurrency adoption. These steps, although lacking specifics, partially soothed concerns after initial disappointment over the absence of crypto reform in Trump's early declarations.
By 1714 GMT, Bitcoin was up 2.8% at $106,048, while the smaller cryptocurrency Ether rose by 4.1% to $3,383.
Nick Twidale, chief market analyst at ATFX Global in Sydney, noted, "What we're seeing is a little profit-taking due to the uncertainties arising from Trump's current stance." Trump-associated crypto ventures, such as the meme coin $TRUMP, experienced declines alongside tokens linked to his administration.
Democratic Senator Elizabeth Warren criticized $TRUMP and $MELANIA coins, expressing concerns about potential risks to governance and investors. The executive order also safeguarded banking services for crypto firms, prohibited the development of U.S. central bank digital currencies that could rival existing tokens, and set a deadline for the working group to propose regulatory adjustments and assess establishing a national digital asset reserve by July.
Market analysts suggested that Bitcoin's upward momentum might temporarily slow down as the market awaits clearer implications of the new policy directives. Jehan Chu, founder of Kenetic Capital in Hong Kong, remarked, "While President Trump’s executive order on crypto largely fulfills his campaign promises, the absence of a specified bitcoin reserve left the market stumbling into the weekend."