Bitcoin fell by 21% after Trump's election: how much did the market lose

Bitcoin has lost 21% of its peak on January 20, and the total market capitalization has decreased by almost $1 trillion. Other cryptocurrencies, including Ethereum, lost even more. Investors were waiting for a clear pro-market policy from US President Donald Trump, but so far they see uncertainty and the threat of new duties.

Reuters writes, UNN reports.

Cryptocurrency prices have fallen sharply in recent weeks, and there are no signs of a quick recovery. Many large digital assets have lost almost all of the gains they made after Donald Trump's election victory, which initially caused a stir in the industry.

Analysts believe that the market will remain weak until a clear signal for growth appears. This could be, for example, a cut in US interest rates or a clear pro-market policy from the Trump administration. Bitcoin, the largest cryptocurrency, fell 21% from its peak on January 20 and returned to the level it was at immediately after Trump's election.

The reason for this is the loss of hopes for the creation of a strategic reserve of bitcoin and the threat of new duties, which reduces interest in risky assets. Other cryptocurrencies have fallen even further. Ethereum has fallen by more than 40% since December, and Trump's meme-coin, which he launched before his inauguration, has lost 80% of its January peak, according to CoinMarketCap.

Trump promised to support cryptocurrencies, called himself the “crypto president” and talked about creating a national bitcoin reserve. He also appointed crypto industry supporters to key positions. Under his leadership, the SEC has closed cases against several crypto companies and dropped a lawsuit against Coinbase.

But this did not have much of an impact on the market, and many believe that expectations were overstated. Instead of acting quickly, Trump set up a working group to develop regulatory rules. Investors hoping for an immediate government buyout of bitcoin were disappointed.

The market is disappointed with this

In addition to Trump's policy, the cryptocurrency market is also under pressure from tight US monetary policy and the threat of new duties.

This only adds to the uncertainty, which does not help bitcoin at all. Until we get clarity on the bitcoin reserve, I don't see any room for a significant price increase

Since its peak in December, the total capitalization of the cryptocurrency market has fallen by almost $1 trillion and now stands at about $2.76 trillion, according to CoinMarketCap.

Investors are revising their expectations, as the first reports of Trump's cryptocurrency task force will be released no sooner than in a month. CF Benchmarks notes that the initial enthusiasm for Trump's support of the crypto industry is gradually changing to more balanced assessments.

They believe that either clear regulation or a powerful catalyst, such as the approval of new ETFs, is needed to restore the market. Despite the volatility, some analysts remain optimistic.

Standard Chartered predicts that bitcoin could reach $500,000 by the end of Trump's term, as more large investors are likely to enter the market. US regulatory documents show that, in addition to hedge funds, cryptocurrencies are actively bought by banks and sovereign wealth funds.

In particular, Abu Dhabi's Mubadala investment fund invested $436.9 million in BlackRock's iShares Bitcoin ETF.

Recall

On February 25, bitcoin fell to a 6-week low amid renewed global trade tensions and problems at a major cryptocurrency exchange.