‘Comments about crypto since Mr Trump took over the presidency have been conspicuous by their absence. This could be why investors are flooding to the exits’
Bitcoin’s value took a nosedive on Friday, plummeting more than 25% from its record highs as the whole crypto market saw red.
The digital currency tumbled below $80,000 (£63,000) in the early hours, erasing most of the gains it had experienced since Donald Trump’s victory in November. Bitcoin had soared to roughly $109,000 (£86,000) when Trump was inaugurated in January, with traders betting on Trump-driven windfalls for the currency.
Yet, subsequent underwhelming action on his bold pre-office vows, including plans for a national Bitcoin reserve, left investors cold. Finance expert Kathleen Brooks, from XTB, noted: “We think that a lot of money went into crypto on the hope that Donald Trump would institutionalise crypto when he got to office.”
“However, comments about crypto since Mr Trump took over the presidency have been conspicuous by their absence. This could be why investors are flooding to the exits.” Trump had, in fact, previously asserted his ambition to make the US the global “crypto capital”.
Crypto, short for cryptocurrency, is the term for digital currencies used predominantly for online transactions. Unlike tangible currencies like dollars or pounds, crypto doesn’t have a physical form.
It can be sent and received between individuals, and is commonly traded for fiat money on platforms called crypto exchanges. Conceived in 2008, Bitcoin remains the largest and most well-established cryptocurrency. Ether follows as the second greatest, known mainly for the Ethereum blockchain network it operates.
Still, crypto as a payment method is scarcely adopted by UK retailers, with minimal practical applications so far. The fall in cryptocurrency value hasn’t been aided by Donald Trump’s launch of his ‘meme coin’ last month—a cryptocurrency serving purely for amusement or speculative purposes.
Mr. Trump shared at the time: “I don’t know much about it other than I launched it, other than it was very successful.” Since its inception and an initial surge, the value of the ‘Trump’ coin has nosedived by roughly 85%, attracting criticism even among crypto circles, where some have dismissed it as a gimmick. Despite the recent downturn, Bitcoin’s worth still towers over its price from the previous year, which hovered around $60,000 (£48,000).
Yet, David Morrison, an analyst at Trade Nation, voiced concerns that the crypto world is “suffering a bit of a meltdown”. He said: “It has certainly unwound most of Bitcoin’s gains following Trump’s election win in November, when a much friendlier regulatory environment was promised.”
