Many in the cryptographic community thought that the elections to the second term of US President Donald Trump would send the prices of Bitcoin à Flothe, and he did it – from $ 69,374 on election day (November 5) to a record of $ 108,786 when the new administration took office on January 20.
But since that time, the price of Bitcoin (BTC) has mainly fallen, drop Below $ 80,000 on February 28 – a drop of 26%.
The new administration has burst into the functions committed to establishing a strategic crypto reserve, a friendly cabinet of crypto and legislation on market reform, among other changes. He has mainly kept his promises so far.
However, it is not too early to ask: “The Trump effect”, does the wave of the Bitcoin price foresee the election of the first friendly American president, was occurring?
Perhaps macro-factors, such as an imminent tariff war and a weakening of the global economy, are to be blamed for market prices. Then there was bybt hacking at the end of February, which dollars’ $ 1.4 billion in the second exchange of global crypto in volume. Perhaps the Trump administration itself is even to blame for having favored chaos and insecurity during its first six weeks in power?
“Macro factors and cryptographic explosions combine to erode confidence”, ” note Bloomberg on February 25. Elsewhere, the Financial Times observed that while some investors hoped that the election of Trump would announce a golden era For Crypto, others, such as American hedge funds, Elliott Management, warned that Trump’s embrace in terms of crypto could lead to an “inevitable collapse” which “could wreak havoc in a way that we cannot yet anticipate”.
A “healthy correction”?
“Although the recent appeal situation has been important, the change in Bitcoin price momentum started long before the $ 1.46 billion hack,” said Cointelegraph Garrick Hileman, an independent cryptocurrency analyst.
Indeed, the correction follows traditional market cycles-that is to say a “classic” case of “buying the rumor, selling the news,” said Hileman, observing more:
“The biggest crypto gains occurred before and just after Trump’s electoral victory, so market recharge time was expected and can even be a healthy correction.”
In addition, cryptocurrencies are more linked to traditional markets today, which makes cryptography prices sensitive to macroeconomic concerns such as inflation, interest rates and trade tensions. “These wider economic pressures alleviate the appetite for risks at all levels,” noted Hileman.
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Justin d’Anethan, sales manager of the consulting company in Token Liquifi, agreed that the market had simply experienced a traditional circumstance “buying the rumor, selling the news”.
Enthusiasm concerning potential pro-Crypto policies as part of a new American administration has made prices for record heights, but enthusiasm turned to pessimism with questions on the deadlines for implementing policies. “Without significantly immediate regulatory changes, the market has corrected,” Anethan told Cointelegraph.
Add the Hack bybit, for which the federal investigation office blame North Korea and “you get a seriously undermined investor confidence,” he continued. In addition, the subsequent laundering / liquidation of stolen assets on various platforms “has created a very real drop pressure on the market”, even if the strategy (formerly Microstrategy) has acquired a massive amount of Bitcoin, added Anethan.
The trends remain positive
However, “the long -term perspectives remain positive,” said McKayresearch, a council for digital assets at Cointelegraph James Mckayresearch. “We have never had a bull cycle which was not interspersed with several corrections of 30%, 40%or even 50%.”
“We have had more positive regulatory developments in the past year than in the previous four years combined,” said McKay, including the repeal of SAB 121 of the Securities and Exchange Commission on January 23, “which will allow general public financial institutions to keep crypto.”
Nevertheless, a certain uncertainty about Trump’s policies can still slip, even if optimism remains high, suggested Hileman:
“Questions remain on the question of whether key initiatives – such as an official” cryptographic advice “or an Bitcoin national reserve – will in fact materialize.”
On March 2, for example, it was reported that the crypto reserve plan still required a vote of the congress.
“If Trump promises to stagnate or do not meet expectations, the feeling will be closed more,” said Hileman.
“The effects always take place”
Perhaps the cryptography sector was too optimistic after the American elections in November?
Hileman does not think so. “The positive impact of Trump’s elections on cryptographic markets is real, but its effects are still going on,” he added.
Rendez-vous on the cabinet and the friendly agency like Paul Atkins at the SEC, Howard Lungick at the Ministry of Commerce, and David Sacks as Crypto Czar are concrete and significant events. Elsewhere, Coinbase and Uniswap no longer have to fear the regulators’ setbacks, because the regulatory surveys on these cryptocurrency exchange platforms have been abandoned.
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But the longer -term implications of a Trump administration remain unclear, according to Hileman. “Recent events, such as the Argentinian president unexpectedly approving a pump and pumping same, highlight the risks of political figures engaged with the crypto.”
Meanwhile, the Trump family, with their own “personal” cryptography initiatives, “risk making similar mistakes that could cause a crypto backlash,” added Hileman.
Eric Trump’s encouraging X articles seem to have moved the cryptography markets. Source: Eric Trump
How to restore market prices growth
What, if necessary, the administration in the coming months for Bitcoin and other restoration parts to restore market prices growth?
“Continuous progress on regulatory orientations, in particular with regard to the reduction of obstacles to the participation of tradfi, is probably the most optimistic development currently at stake,” said McKay. He does not think that the “license” of SAB 121 was fully appreciated by the market – another reason why prices could soon increase.
There are other long-term engines that have not been much discussed in recent news cycles, but are essential for future adoption and market prices growth, including a high continuous demand for granted funds (ETF), an increase in the adoption of businesses and sovereigns, and “the” crawling “supply shock, added McKay.
Then, also, the prices temporarily lowered for bitcoin, ether (ETH) and other cryptocurrencies are not necessarily a bad thing. They can represent an opportunity to purchase. “It would be shocking not to see massive players and even retail investors salivate in (the prospect of buying) crypto now essentially 20% to 25% cheaper,” said Trader d’Anethan.
Hileman is expecting the new administration to be able to create a crypto reserve within the US government, which would surely make industry a boost, even if the sector is further away from the decentralized cypherpunk origins of crypto.
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