- Cryptocurrency stocks spiked but then fell following Trump’s pro-bitcoin speech as investors reacted to his campaign promises.
- Bitcoin briefly topped $70,000, signalling continued market volatility and investor reaction to political endorsements.
OUR TAKE
Monday saw a notable drop in the share prices of cryptocurrency companies, as bitcoin retreated from its peak above $70,000, influenced by Trump’s recent endorsement of cryptocurrency. The fluctuation illustrates the ongoing volatility in the crypto market. Nevertheless, the outlook remains positive, with institutional backing and new ETFs promising a potential upswing for bitcoin and ether in the coming years. This dynamic scenario highlights the complex interplay between policy, investor sentiment and regulatory landscapes that will shape the future of cryptocurrencies.
—Heidi Luo, BTW reporter
What happened
Shares in New York-listed cryptocurrency companies felt the heat on Monday as the price of bitcoin slipped back below $70,000, shortly after surpassing that threshold.
This downturn wiped out the gains made earlier in the day by Donald Trump’s encouraging words about crypto during his campaign speech. Trump, who has been a strong supporter of bitcoin, talked about loosening regulations if elected.
He even promised to shake up the leadership of the SEC and set up a national bitcoin reserve, which initially sent investor sentiment and share prices soaring.
But the excitement didn’t last long. As the day wore on, investors began to pull out, causing the market to plummet. Big crypto companies such as Coinbase, Bitfarms, Riot Platforms and CleanSpark saw their earlier share price gains dramatically reversed.
Even MicroStrategy, which is heavily invested in bitcoin, ended the day down 3.9% after initially posting some gains. The quick turnaround from boom to bust just goes to show how quickly things can change in the world of crypto stocks.
Also read: Pro-crypto Trump drives split between bitcoin, global equities
Also read: Wall Street’s ETF engine revs up after $17B bitcoin haul
Why it’s important
Despite these ups and downs, people are still pretty hopeful about the future of bitcoin, especially with more people getting into it and new bitcoin and ether ETFs popping up. This could mean a big boom for bitcoin in the next year or two.
Still, SEC Chairman Gary Gensler, the Biden administration’s top crypto enforcement cop, has said that investing in things like bitcoin is pretty unpredictable and risky
And there’s also some buzz about Donald Trump getting behind bitcoin. He wants to set up a special bitcoin stockpile if he wins the election.
This has some people excited because it could really shake things up for the price of bitcoin. But it all depends on him winning again.
“The bitcoin strategic reserve for the US is a major milestone for bitcoin, but it still requires Trump to win,” said CoinCorner CEO Danny Scott.
