Bitcoin Price Plummets: Trump Policy Discrepancy and El Salvador's Policy Shift Trigger Market Panic

Bitcoin Price Plummets: Trump Policy Discrepancy and El Salvador's Policy Shift Trigger Market PanicBitcoin's price recently experienced another significant drop, falling below $100,000 and triggering intense market volatility and massive liquidations. CoinGlass data shows Bitcoin plummeted to $99,678

Bitcoin Price Plummets: Trump Policy Discrepancy and El Salvador's Policy Shift Trigger Market Panic

Bitcoin's price recently experienced another significant drop, falling below $100,000 and triggering intense market volatility and massive liquidations. CoinGlass data shows Bitcoin plummeted to $99,678.2 in 24 hours, representing a daily decline exceeding 2%. Concurrently, other major cryptocurrencies such as Ethereum, Dogecoin, and TRUMP also experienced widespread declines, with drops exceeding 6%, 8%, and 12%, respectively. This market upheaval resulted in over 240,000 liquidations totaling $540 million, with the largest single liquidation reaching $11,842,800, exacerbating market panic.

Market analysts attribute this Bitcoin price decline to the discrepancy between US President Trump's policies and El Salvador's amendment to its Bitcoin Law. While Trump fulfilled campaign promises by introducing policies supportive of cryptocurrencies, these policies differed significantly from market expectations. Trump's executive order established a presidential working group to coordinate the creation of clear regulations for the digital asset industry and prohibit the creation of Central Bank Digital Currencies (CBDCs). However, the order fell short of market expectations by not authorizing the establishment of a "national strategic Bitcoin reserve," diverging from Trump's previous pledge to incorporate Bitcoin into national strategic reserves, resulting in a lukewarm market response.

This presidential working group will conduct a comprehensive review of all regulations, guidelines, and orders impacting cryptocurrencies within the next 180 days, submitting a report to the president with regulatory and legislative proposals and recommendations. However, the lack of a concrete Bitcoin reserve announcement in the short term dampened market expectations for a short-term bullish Bitcoin outlook. Nick Forster, founder of on-chain options protocol Derive, noted in his analyst report that the Trump administration's executive order focused on evaluating digital asset reserves rather than a strategic Bitcoin reserve, leading the market to perceive limited upside potential for Bitcoin.

Meanwhile, El Salvador, the world's first country to adopt Bitcoin as legal tender, quietly amended its Bitcoin Law, removing Bitcoin's status as official currency. This shift followed sustained pressure from the International Monetary Fund (IMF) over the past two years. The IMF made "reducing Bitcoin risk" a precondition for approving a much-needed $1.4 billion loan for the Salvadoran government. Consequently, the Salvadoran legislature amended the Bitcoin Law, repealing certain provisions, making Bitcoin acceptance voluntary rather than mandatory, and prohibiting its use for tax payments.

Despite Bitcoin's recent decline, the market generally maintains a positive outlook on its future trajectory. Binance CEO Richard Teng stated that regulatory changes under Trump's leadership, strategic US initiatives, and the momentum behind cryptocurrency support suggest Bitcoin could reach new all-time highs by 2025. He believes the Trump administration's policies could bring much-needed regulatory clarity, driving the next phase of growth for Bitcoin and other cryptocurrencies.

Similarly, BitMEX co-founder Arthur Hayes expressed positive expectations for Bitcoin's future. He predicted a significant short-term correction, but viewed it as temporary. He believes that as global central banks resume quantitative easing, market liquidity will be reinjected, reigniting Bitcoin's upward trajectory and potentially pushing its price to $250,000 per coin by the end of the year.

However, market participants should approach these optimistic predictions with caution. The intense volatility of Bitcoin's price and the continued occurrence of market liquidations indicate the cryptocurrency market remains highly risky. While the Trump administration's policies support cryptocurrency development, their specific implementation and ultimate effectiveness remain uncertain. El Salvador's policy shift also reflects the international community's cautious approach to cryptocurrency regulation. Therefore, investors should closely monitor market dynamics, invest cautiously, and avoid blindly following trends.

In conclusion, the recent decline in Bitcoin's price is a result of several converging factors, including the discrepancy in the Trump administration's policies, El Salvador's policy shift, and inherent market volatility. While some market participants express optimism about Bitcoin's future, investors should remain cautious, rationally assess risks, and make informed investment decisions. The future trajectory of Bitcoin's price will depend on numerous factors, including the implementation of regulatory policies, shifts in market sentiment, and the evolution of the global macroeconomic environment. Continuously monitoring market information and conducting independent analysis are crucial for investors. Market volatility is high; invest cautiously.

Source: Finance World Author: Gui Lin