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The cryptocurrency market came alive on Friday, the last trading day for Wall Street markets before Trump’s presidency begins on Monday. Sure, cryptocurrencies are traded 24/7, but volume and liquidity decrease over the weekend, so investors build their final positions before the new administration takes over. the relay.
Bitcoin (BTC 0. 96%) led the way, up 5. 6% in the last 24 hours as of 12:30 p. m. ET and surpassing $105,000 consistent with the token. Ethereum (ETH 2. 83%) is up a modest 2. 6% during this steady period, and Dogecoin (DOGE -3. 00%) is up 7. 3%.
Reports are circulating in the media that President-elect Trump will sign an executive order making crypto a national priority on Day 1 of his term. It’s not entirely clear what that means outside of replacing the current Securities and Exchange Commission chairman with a more crypto-friendly regulator.
Traders buying tokens might be surprised at the slow pace of policy replenishment in Washington, D. C. and where those adjustments come from. Congress will most likely have to act to clarify industry regulations, but that doesn’t mean meme coins and blockchain tokens necessarily increase in value. Rather, it means that assets such as stocks and bonds can simply be traded on the blockchain and that more innovations, such as start-ups, can take place on the blockchain than through expensive legal channels.
I think the policy changes will broadly benefit crypto, but the winners may not be the obvious tokens rising today.
In this era between the election and the inauguration, the market speculated on everything from regulation to cryptocurrency reserves in the United States. Investors believed the rumors. Now it’s time to pay attention to the news.
It will be much more difficult to gain momentum if the news does not meet expectations. The Federal Reserve makes Bitcoin or any other cryptocurrency a reserve currency without an act of Congress, and that is unlikely to happen, given the narrow majority currently held by both bodies.
Most ETF inflows into the market have been discounted since they occurred in early 2024.
The most likely end result for cryptocurrencies is some gloom as the market begins to realize that the next catalyst is not near. But for long-term investors, I think the expansion of stablecoins for everything from currency exchanges to online bills is something to watch. This is the true application that blockchain is designed for; it is simply possible that the price of the maximum tokens will not increase.
Today’s move is driven by more speculation that President Trump will be good for the crypto market. But that kind of speculation has led investors astray before. In 2021, it was thought that inflation and high budget deficits would lead to big gains for Bitcoin and other cryptocurrencies, but the opposite took place. The market crashed in 2022 and has only recently recovered.
I think blockchain has a bright future, but I won’t be buying tokens on a hypothetical basis right now. I think there will be greater opportunities to buy the dip in the future.
Travis Hoium holds positions in Ethereum. The Motley Fool publishes and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
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