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Highlights
- Bitcoin (BTC) drops by 3.7% as traders lock in profits after Trump’s crypto-related executive order.
- Smaller tokens, such as Solana and Cardano, experience declines of more than 5%.
- Trump’s executive order forms a working group to advise on crypto policy but falls short of establishing a Bitcoin reserve.
Bitcoin (BTC) faced a notable dip on January 27, slipping by 3.7% to fall below $101,000. The decline came just days after US President Donald Trump issued an executive order identifying the digital-assets industry as a key driver of US innovation. Despite the president’s efforts to bring clarity to the crypto market, traders took advantage of recent gains, booking profits and causing a pullback in Bitcoin’s price. The slump was felt across the market, with smaller tokens like Solana (SOL) and Cardano (ADA) seeing drops of over 5%.
Trump’s executive order, signed on January 24, created a working group tasked with advising the White House on a regulatory framework for digital assets. The group is also set to explore the potential creation of a crypto stockpile, with a six-month timeline to propose a framework. While the order brought clarity, it stopped short of confirming the establishment of a Bitcoin reserve—something Trump had promised during his campaign. This omission led to some disappointment in the market, as noted by Sean McNulty, head of APAC derivatives at FalconX, who explained that the market had largely priced in the expectations of the executive order, leaving traders unsatisfied with the lack of immediate action on a Bitcoin reserve.
Despite the initial market pullback, the digital-assets market showed resilience in the aftermath of the executive order. Bitcoin, for instance, has gained over 50% since Trump’s election victory in early November 2024. Although Trump’s stance on crypto shifted from skepticism to support during his campaign, his administration’s moves, including naming venture capitalist David Sacks as the AI and crypto czar, have contributed to growing optimism in the sector. The days leading up to his inauguration saw an increased embrace of the crypto industry, exemplified by the launch of memecoins by Trump and his wife Melania, highlighting the sector’s increasing political and financial influence.
The market’s reaction to Trump’s executive order underscores the ongoing volatility in the crypto space, where market sentiment can shift rapidly based on regulatory news. Although Bitcoin and other tokens may have experienced a short-term dip, the long-term outlook for the digital-assets industry remains influenced by the developments surrounding government policy and the increasing institutional interest in the sector.
