Bitcoin Plunges Below $100,000 Amid Market Volatility: Trump's Crypto Policies Fall Short of Expectations, What's Next?CoinGlass data shows that Bitcoin's price has fallen below $100,000 per coin, trading at $99,290 at press time, representing a daily drop of over 2%. This decline is not an isolated incident; the cryptocurrency market as a whole is experiencing a downward trend
Bitcoin Plunges Below $100,000 Amid Market Volatility: Trump's Crypto Policies Fall Short of Expectations, What's Next?
CoinGlass data shows that Bitcoin's price has fallen below $100,000 per coin, trading at $99,290 at press time, representing a daily drop of over 2%. This decline is not an isolated incident; the cryptocurrency market as a whole is experiencing a downward trend. Ethereum is down over 6%, Dogecoin over 8%, and TRUMP coin has plummeted by more than 12%. This market volatility is linked to the discrepancy between expectations and the actual cryptocurrency-related policies implemented by US President Trump, sparking market concerns.
Following his inauguration, Trump swiftly signed executive orders fulfilling his campaign promises concerning cryptocurrencies. The order established a presidential task force to coordinate the development of a clear regulatory framework for the digital asset industry and to prohibit the creation of Central Bank Digital Currencies (CBDCs). This task force, headed by David Sacks, involves multiple federal agencies, including the Department of the Treasury, the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
The task force's mandate includes identifying all government agency regulations, guidance documents, and orders impacting cryptocurrencies within 30 days, and submitting recommendations within 60 days. Within 180 days, the task force will submit a report to the President containing regulatory and legislative proposals and recommendations.
However, a significant gap exists between market expectations and reality. Trump did not, as promised during his campaign, immediately establish a "national strategic Bitcoin reserve." He had previously stated his intention to hold Bitcoin in the national strategic reserve and pledged to be the "crypto president."
In actuality, Trump instructed the new task force to assess "the potential creation and maintenance of a national digital asset reserve" and propose "standards for establishing such a reserve, potentially from cryptocurrencies legally seized by the federal government through its law enforcement work." This implies that the government's holdings in this reserve could extend beyond Bitcoin.
This divergence between policy implementation and market expectations partly explains the recent Bitcoin price correction. The market had hoped that strong support from the Trump administration would propel Bitcoin prices even higher. However, the lack of a direct, large-scale Bitcoin reserve plan has undermined market confidence.
Despite this, some institutions and individuals remain optimistic about Bitcoin's long-term prospects. Binance CEO Richard Teng predicts that Bitcoin will hit an all-time high in 2025, driven by regulatory changes under Trump's leadership, strategic US initiatives, and the growing momentum supporting cryptocurrencies. He believes that the Trump administration's policies could bring much-needed regulatory clarity, fueling the next phase of growth for Bitcoin and other cryptocurrencies. He also points out that the US House and Senate are now more supportive of cryptocurrencies than in the past.
However, not all views are so optimistic. BitMEX co-founder Arthur Hayes predicted on social media a significant short-term Bitcoin correction, potentially dropping to the $70,000-$75,000 range, possibly accompanied by a minor financial crisis. He simultaneously believes that as global central banks resume quantitative easing, injecting liquidity back into the market, Bitcoin will resume its upward trajectory, potentially surging to $250,000 by the end of the year.
Other institutions offer differing predictions. Xinhua Finance reported that international analysts predict Bitcoin could reach $200,000 by the end of 2025.
The discrepancies in these predictions reflect the immense uncertainty surrounding Bitcoin's future. While Bitcoin's price appreciation is noteworthy, the inherent risks should not be overlooked. The combination of high volatility and high leverage is one of the most prominent risk points in the crypto market. During periods of heightened market sentiment, investors tend to utilize high leverage tools to pursue higher returns, but once the market reverses, the risk for highly leveraged accounts quickly accumulates, potentially triggering market panic and large-scale liquidations.
Yu Jianing, co-chair of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, highlighted the risks associated with the combination of high volatility and high leverage, urging investors to exercise caution and avoid blindly chasing price increases.
Zhao Wei, senior researcher at OKX Research Institute, believes that the ability of Bitcoin to sustain its upward momentum depends on the speed at which investors digest positive news and changes in the monetary and regulatory policies of major developed countries. In the short term, Bitcoin may experience sharp adjustments and heightened uncertainty.
In conclusion, while the Trump administration has introduced supportive cryptocurrency policies, the specific measures fall short of market expectations, resulting in a Bitcoin price correction. Bitcoin's future trajectory will depend on the combined impact of various factors, including regulatory policies, market sentiment, the macroeconomic environment, and technological advancements. Investors should remain cautious, invest rationally, and avoid blindly following trends.
Daily Economic News, compiled from Securities Times, Xinhua Finance, and Reference News.
Disclaimer: This article and its data are for informational purposes only and do not constitute investment advice. Readers are solely responsible for any risks incurred based on this information.
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