Cryptocurrency Market Declines Following Trump’s Inauguration

Cryptocurrency Crash in 2022 A Case Study of Market Volatility

Key Points

  • Bitcoin dropped 4% to $103,550 following Trump’s inauguration, while ether and XRP declined by 2% and 6%, respectively.
  • The TRUMP token fell 26%, and Melania Trump’s meme token lost 54% in 24 hours.
  • Investor optimism faded due to the new administration’s lack of concrete pro-crypto policies.
  • Analysts urge caution, warning against emotional trading driven by fear of missing out (FOMO).

Bitcoin and other major cryptocurrencies experienced a significant decline on Tuesday as investor enthusiasm surrounding President Donald Trump’s inauguration began to wane. Market sentiment, which had been optimistic about Trump’s pro-crypto stance, cooled amid a lack of concrete policy announcements regarding digital assets.

According to CoinGecko data, TRUMP, a cryptocurrency token launched last week to represent the new U.S. president, plummeted by 26% within 24 hours. Meanwhile, a meme token First Lady Melania Trump released over the weekend dropped by 54% in a single day. Bitcoin declined 4%, trading at around $103,550. Other major digital assets, such as ether and XRP, followed suit, falling 2% and 6%, respectively.

Investors anticipated that Trump’s administration would bring favorable regulations and policies to the crypto market, including the possibility of a federal bitcoin reserve. However, the absence of specific policy details in Monday’s inauguration speech left markets uncertain, prompting a sell-off.

Kenneth Lamont, a principal at Morningstar, advised investors to approach the market cautiously and avoid impulsive decisions driven by market hype. “If Trump follows through on his campaign promises, cryptocurrency markets could experience significant growth,” Lamont said. “However, investors should resist the temptation of jumping in due to the fear of missing out and instead take a measured approach.”

The cryptocurrency market is known for its extreme volatility. Bitcoin has previously seen price swings of thousands of dollars in a single day, while altcoins such as ether and XRP tend to exhibit even greater fluctuations.

Lamont further cautioned retail investors about the risks of market timing, noting that many often buy or sell at inopportune moments. He stressed the importance of staying informed and avoiding speculative trading decisions based on short-term market movements.

EDITORIAL TEAM
EDITORIAL TEAM
TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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