Bitcoin Retreats As Traders Await Trump Crypto Executive Order

(Bloomberg) -- Bitcoin extended a retreat from a record high as traders awaited pro-crypto policy directions from Donald Trump following his inauguration as the 47th US president.

The market was expecting an executive order on the digital-asset sector but it has failed to materialize so far amid a blitz of other presidential actions.

The largest digital asset slid about 1% to change hands at $101,300 as of 9:46 a.m. Tuesday in Singapore. The token hit a peak of $109,241 ahead of Trump’s swearing in before falling back.

Before the inauguration, Trump and his wife Melania unveiled memecoins that whipsawed the market by diverting flows. Investors later embraced the notion that the move further incentivizes Trump to embrace crypto-friendly policies.

Bloomberg News previously reported that Trump is considering an executive order designating the asset class a “national priority.” Trump became an ardent supporter of the digital-assets industry on the campaign trail, after once having branded Bitcoin a scam. He pledged to make the US the world’s crypto capital and backed the idea of creating a strategic Bitcoin stockpile.

In the wider crypto market, tokens including Ether and Solana dropped. The Trump memecoin traded at about $31, according to figures from CoinMarketCap, having hit an overall market value of more than $15 billion on Sunday before declining sharply.

The Trump and Melania memecoins drew criticism from some industry executives, partly on the worry that they risk making crypto look frivolous.

Others took a different view. Ben El-Baz, managing director of HashKey Global, said the tokens debuted by the Republican and his team have further accelerated Bitcoin’s momentum, as retail traders look for his administration to “prioritize and reaffirm his commitment to the crypto industry.”

Memecoins are a kind of cryptocurrency with questionable intrinsic value and high volatility. They rely on social media tailwinds to drive up their price and can slide as quickly as they climb.

An 80% share of the Trump token is owned by a Trump Organization affiliate called CIC Digital LLC, and a related entity called Fight Fight Fight LLC — whose name echoes the words Trump mouthed after a bullet grazed his ear during the campaign trail. Their holdings will be unlocked over a three-year period.

To Gautam Chhugani of Bernstein, a meme coin “capitalizing on Trump’s brand and politics, has potential longevity.” And while some may “cringe,” he adds that this marks the start of a “new crypto regulatory era.”

According to the website, 200 million of the tokens immediately became available, a supply that will grow to 1 billion over three years.

The small print on the website states the token isn’t intended to be an “investment opportunity, investment contract, or security of any type.” Major exchanges like Coinbase Global Inc. and Binance Holdings Ltd. nonetheless said during the weekend that they intended to list the token on their platforms. Robinhood Markets Inc. announced on Monday that it too had listed the token.

Jonathan Yark, senior quantitative trader at crypto market maker Acheron Trading, said the memecoin “confirmed that digital assets and, most importantly, Bitcoin will have the backing of the US which presents significant opportunity.”