The bitcoin (BTC) market has reacted enthusiastically to the new measures of Donald Trump’s government.
Spot bitcoin exchange-traded funds (ETFs), i.e. those that invest directly in BTC, recorded an increase in demand in the United States on Friday. They ended the day with more than half a billion dollars (USD) in tickets.
With this, they broke the streak of declining purchases that these ETFs were experiencing. They had come from three consecutive days of receiving lower capital inflows.
After collecting a peak of USD 975 million last Friday, the last day before Trump’s presidential inauguration, they perceived lower demand day by day. On Tuesday, the next day they traded after the Monday holiday due to the change of government, USD 802 million entered the instruments. Then, USD 248 million entered on Wednesday and USD 188 million on Thursday.
The reversal of this trend, with the increase in demand at the end of the week, occurs after new government and regulatory policies in the United States on the digital asset ecosystem. Most of them occurred on Thursday evening, when the stock exchanges were closed, so Friday’s performance reflects the ETF market’s reaction to the new regulations..
Presidential Task Force, Senate Committee on Digital Assets Introduced
The series of developments began, as reported by CriptoNoticias, with the appointment of Republican Senator Cynthia Lummis as president of a new Senate committee dedicated especially to digital assets.
“Congress must urgently pass bipartisan legislation that establishes a comprehensive legal framework for cryptocurrencies and strengthens the US dollar through a strategic bitcoin reserve,” Lummis stated via X after his appointment.
Trump promised during the campaign that he would create a strategic reserve of bitcoin for the government, so Lummis’ statement appears to advance this initiative. This is something desired by the market, given that legitimizes the asset more and motivates other governments to do the same. And, with greater demand, the price would be pressured upwards.
Trump later mentioned cryptocurrencies for the first time in a speech since he became president. “The United States will be a manufacturing superpower and the world capital of artificial intelligence and cryptocurrencies,” he said in a speech he gave in Davos.
Then, the country’s Securities and Exchange Commission (SEC) announced the elimination of regulation SUB 121. This provision established accounting obligations for financial institutions that made it difficult for them to hold users’ crypto assets. That’s why It is expected that, with this change, banks will begin to massively offer services with bitcoin.
“This will be a huge-huge catalyst for long-term bitcoin price appreciation,” said Eric Weiss, a board member at miner Core Scientific. There are even analysts like James Van Straten who classified the cancellation of SUB 121 as more important than a strategic reserve of bitcoin in the short term, due to its implications for the market.
Following this sequence of events, the White House, in charge of the new government, presented multiple executive orders related to the ecosystem. These include the creation of a president’s task force on digital asset markets. This team will be tasked with various tasks, such as evaluating the formation of a national stockpile of such assets.
With this panorama, Prospects for bitcoin’s bullish trend to continue this year strengthen. At the moment, its all-time high price has been USD 109,300, a level marked minutes before Trump’s presidential inauguration.
Since the inauguration, the lowest prices bitcoin has seen were between the $100,000 and $101,000 range, forming this zone as its new support for the moment. Meanwhile, it has remained highly volatile, mostly up to around USD 107,000.
