Bitcoin, the world's largest cryptocurrency, is hovering around the $90,000 range after it saw its biggest drop this weekend since the 2024 US presidential elections concluded, according to a Bloomberg report.
Bitcoin slipped by 3 per cent on November 16 and 17 (Saturday and Sunday) before paring losses at $90,100 in the morning in Singapore on November 18 (Monday).
IG Australia Pty Market Analyst Tony Sycamore wrote in a note that Bitcoin became “overheated” after the US election results.
The drop was due to traders exercising caution and assessing the potential impact of US President-elect Donald Trump’s policy agenda, it BB added. There is scepticism about whether Trump can deliver on all his crypto-related promises.
Further, while the US markets have been enthused by Trump's business-friendly stance, inflation and the possibility of trade tariffs have now tempered expectations, the report noted. Besides the government, the US Federal Reserve (Fed) moves can also "influence the speculative demand for digital tokens", it said.
Trump has pledged to create a friendly regulatory framework for crypto, set up a strategic Bitcoin stockpile and make the US the global hub for the industry.
"Crypto legislation may be approved soon under a Trump administration, spurring a shift away from regulation by enforcement to a more collaborative approach," JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou wrote in a note.
The banking sector is looking to reap benefits, by engaging with digital assets and the markets are "hopeful of approval for crypto exchange-traded funds (ETFs) investing in tokens other than just the top two, Bitcoin and Ether," the strategists added.
Regulatory clarity would be a tailwind for venture capital investing, mergers and acquisitions and initial public offerings, according to the strategists. But the establishment of a US Bitcoin reserve is a “low-probability event,” they added.
A onetime crypto skeptic, the president-elect changed tack after digital-asset firms spent heavily during election campaigning to promote their interests.
US ETFs investing directly in Bitcoin attracted a net inflow of $4.7 billion between November 6-13, the day the original cryptocurrency set an all-time peak, based on data compiled by Bloomberg. But about $771 million exited the products over November 14 and 15 (Thursday and Friday).
(With inputs from Bloomberg)
