Bitcoin Plunges Below $100,000 as Trump's Crypto Policy Falls Short of Expectations, Exacerbating Market Volatility

Bitcoin Plunges Below $100,000 as Trump's Crypto Policy Falls Short of Expectations, Exacerbating Market VolatilityCoinGlass data shows Bitcoin's price has continued its recent decline, breaking below the psychologically significant $100,000 mark. At press time, Bitcoin is trading at $99,290, down over 2% for the day

Bitcoin Plunges Below $100,000 as Trump's Crypto Policy Falls Short of Expectations, Exacerbating Market Volatility

CoinGlass data shows Bitcoin's price has continued its recent decline, breaking below the psychologically significant $100,000 mark. At press time, Bitcoin is trading at $99,290, down over 2% for the day. Other cryptocurrencies have also experienced widespread declines, with Ethereum falling over 6%, Dogecoin dropping over 8%, and TRUMP coin plummeting by over 12%. The market is experiencing significant volatility, impacting investor confidence.

This Bitcoin price drop is closely linked to the disparity between expectations and the actual cryptocurrency policies enacted by President Trump since taking office. While Trump fulfilled campaign promises by signing an executive order aimed at coordinating the establishment of clear regulations for the digital asset industry and prohibiting the creation of Central Bank Digital Currencies (CBDCs), this fell far short of the widely anticipated "national strategic Bitcoin reserve" plan.

On January 20th, Trump assumed the presidency and swiftly signed an executive order fulfilling his campaign promises regarding cryptocurrencies. This order established a presidential task force to coordinate the development of a clear regulatory framework for the digital asset industry and explicitly prohibited the creation of CBDCs. The task force, headed by David Sacks, involves key federal agencies including the Treasury Department, Department of Justice, Securities and Exchange Commission, and Commodity Futures Trading Commission.

The task force's mandate includes: identifying all government agency regulations, guidance documents, and orders affecting cryptocurrencies within 30 days; proposing recommendations on these items within 60 days; and submitting a report to the President within 180 days containing regulatory and legislative proposals and recommendations.

However, it's noteworthy that Trump did not authorize the immediate establishment of a "national strategic Bitcoin reserve," as promised during his campaign. Last July, Trump stated he would hold Bitcoin in the national strategic reserve, promising to be the "crypto president." This policy discrepancy undoubtedly shocked the market.

Instead, Trump instructed the newly formed task force to evaluate "the potential creation and maintenance of a national digital asset reserve" and propose "standards for establishing such a reserve, potentially from cryptocurrencies legally seized by the federal government through its law enforcement work." This implies that the government's holdings in this reserve could extend beyond Bitcoin.

Market reaction to Trump's cryptocurrency policies has been mixed. Binance CEO Richard Teng predicted that Bitcoin will hit an all-time high in 2025, driven by regulatory changes under Trumps leadership, strategic US moves, and pro-crypto momentum. He believes the Trump administration's policies could bring much-needed regulatory clarity, fueling the next phase of growth for Bitcoin and other cryptocurrencies. He also noted significantly increased support for cryptocurrencies in the US House and Senate compared to the past.

However, not all market participants are optimistic. BitMEX co-founder Arthur Hayes recently predicted a significant Bitcoin correction in the short term, potentially dropping to the $70,000-$75,000 range, potentially accompanied by a minor financial crisis. He believes that once global central banks resume quantitative easing and liquidity re-enters the market, Bitcoin will resume its upward trajectory, potentially soaring to $250,000 by year-end.

Other institutions offer conflicting predictions. Xinhua Finance cited international analysts predicting Bitcoin could reach $200,000 by the end of 2025.

While Bitcoin's price appreciation potential is alluring, the inherent risks should not be overlooked. Yu Jianing, co-chairman of the Blockchain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, points out that the combination of high volatility and high leverage is one of the most prominent risks in the crypto market. During periods of high market sentiment, investors often use high leverage to pursue higher returns, but once the market reverses, the risk for highly leveraged accounts accumulates rapidly, triggering market panic and large-scale liquidations.

Zhao Wei, a senior researcher at OKX Research Institute, believes that Bitcoin's sustained upward trend depends on investors' speed in digesting positive news and changes in monetary and regulatory policies of major developed countries. In the short term, Bitcoin is likely to experience sharp adjustments and volatility, with high uncertainty remaining.

In conclusion, the current Bitcoin market faces multiple influencing factors, including policy-related disparity and market volatility. Investors should approach the market cautiously, invest rationally, and avoid blindly following trends.

Compiled by Daily Economic News, based on reports from Securities Times, Xinhua Finance, and Reference News.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Any actions taken based on this information are at your own risk.