Cryptocurrencies rose on Tuesday as bullish investor sentiment returned after President Donald Trump’s first full day in office.
According to Coin Metrics, the price of Bitcoin was last up more than 2% to $106,201.70. The broader crypto market, as measured by the CoinDesk 20 index, rose 1.6%.
Meanwhile, the “Official Trump” token, which was launched last week on behalf of the new US leader, has reduced its losses to 2.5% in the past 24 hours, after falling more than 20% earlier, according to CoinGecko.
The Securities and Exchange Commission announced Tuesday afternoon that Acting Commissioner Mark Ueda has launched a “Crypto Task Force” focused on “developing a comprehensive and clear regulatory framework for crypto assets.”
Cryptocurrency investors are hailing President Trump’s arrival in the White House as a positive moment for the industry. The president has promised to introduce supportive policies for cryptocurrencies, including a more accommodative regulatory framework and a federal Bitcoin vault.
There were no specific policy announcements in this area at President Trump’s inauguration ceremony on Monday. Initially, it looked like it would take the wind out of the crypto market.
Morningstar President Kenneth Lamont has warned investors not to jump into crypto trading without being properly informed about the risks involved.
“Cryptocurrency markets could continue to soar if Donald Trump fulfills his campaign promises. But investors are holding back, resisting the sirens of fear of missing out. ,” Lamont said in an emailed comment Tuesday.
Cryptocurrencies are known to be unstable. Bitcoin, the world’s largest digital coin, has historically risen and fallen by thousands of dollars in a single day. Alternative coins, or “altcoins,” such as Ether and XRP have proven to be even more volatile.
“Fear of missing out is not an investment strategy. For many investors, the temptation to get rich easily is strong,” Lamont said, adding that individual investors “have bad market timing and buy and sell at the worst possible time.” There is a trend,” he added.
—CNBC’s Jeff Cox contributed reporting
