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A caricature image of US President-elect Donald Trump holding cryptocurrency tokens, pictured in front of the White House to mark his inauguration, is shown at a Coinhero store in Hong Kong, China, Monday, January 20, 2025 .
Paul Yeung | Bloomberg | Getty Images
Bitcoin and other cryptocurrencies sank on Tuesday, as bullish investor sentiment surrounding cryptocurrencies cooled following the inauguration of President Donald Trump.
TRUMP, a token launched last week representing the new leader of the United States, has surged 26% in 24 hours, according to CoinGecko data. Meanwhile, a meme token released on sunday from first lady Melania Trump, crash 54% in one day.
Bitcoin sank about 4% to $103,550, while ether and XRP were down 2% and 6%, respectively.
Crypto investors hailed Trump’s arrival in the White House as a positive moment for the industry. The president has promised to introduce supportive policies for cryptocurrencies, including a welcoming regulatory framework and a federal hoard of bitcoin.
While Trump is considered to be a beneficiary of crypto, his inauguration on Monday lacked any concrete policy announcement regarding the sector. That seemed to be the primary factor taking the wind out of the crypto market’s sails on Tuesday.
Kenneth Lamont, a principal at Morningstar, warned investors not to jump into crypto trading without being properly informed about the risks involved.
“If Donald Trump delivers on his election promises, we can see that the cryptocurrency markets continue to grow. However, investors would do well to resist the siren of fear of missing out, and sit on his hands,” Lamont said in emailed comments Tuesday.
Cryptocurrencies are known to be volatile. Bitcoin, the world’s largest digital currency, has already risen or fallen by thousands of dollars in a day. Alternative currencies, or “altcoins”, such as ether and XRP, have proven even more prone to fluctuations.
“Fear of missing out is not an investment strategy. For many investors, the lure of easy wealth is strong,” said Lamont, adding that retail investors “tend to be poor at timing the market , buy and sell in the worst moments.”
