Explore our expert analysis here on the SEC’s next move and its implications for XRP’s future.
Bitcoin Sees Volatility as Trump’s Crypto Stance Unfolds
Meanwhile, bitcoin (BTC) enjoyed a pre-Trump inauguration rally on speculation of pro-crypto executive orders.
However, BTC gave up early gains as President Trump’s America First Priorities skipped crypto altogether. Markets had hoped for an executive order classifying BTC as a US Strategic Bitcoin Reserve (SBR).
In January, Anthony Scaramucci said the incoming Trump administration could acquire 500,000 BTC, stating the Senate Banking Committee Chair, Tim Scott, and Treasury Secretary Scott Bessent advocate an SBR.
Trump’s crypto silence weighed market expectations of a US SBR. According to Polymarket, bets on President Trump creating a BTC reserve within the first 100 days tumbled 20% on Monday to 39%. On November 7, 60% of betters had expected President Trump to create a BTC reserve in his first 100 days.
There was also speculation President Trump would repeal Joe Biden’s veto President Biden’s veto of the bipartisan vote to withdraw the SEC’s Staff Accounting Bulletin 121 (SAB 121).
SAB 121 is an SEC requirement for companies, including banks, to hold crypto assets on their balance sheets even if they hold the cryptos under customer custody. This regulation increases the cost for banks to hold crypto for clients. Consequently, it limits the availability of crypto services. A repeal could also boost BTC-related banking services and demand.
Markets Remain Hopeful for an SBR
Despite Trump’s lack of crypto attention, markets remain optimistic about a US SBR. Senator Cynthia Lummis continues advocating for an SBR. Notably, the Senator introduced the Bitcoin Act in December. The bill proposes the US government accumulate one million BTC (5% of the total supply) over five years, with a minimum mandatory holding period of 20 years.
A bipartisan vote in favor of an SBR would tilt BTC’s supply-demand balance heavily in its favor. Amicus Curiae attorney John E. Deaton recently speculated that BTC could climb to $1 million if the US government passes the Bitcoin Act, attributing his projection to a “Nation State FOMO.”
Bitcoin Price Outlook
On Monday, January 20, BTC gained 0.96%, partially reversing Sunday’s 2.07% loss to close at $102,408. Significantly, BTC climbed to a record high of $109,350 before retreating.
BTC’s price trends hinge on Trump’s executive orders and plans for an SBR.
Repealing the SAB 121 veto, US BTC-spot ETF inflows and positive US SBR developments could push BTC beyond Monday’s record high of $109,350. Conversely, falling bets on an SBR and BTC-spot ETF outflows could drag BTC toward $95k.
Following Trump’s inauguration, crypto-related executive orders could be crucial for BTC and the broader market.
