Crypto prices tumble as Trump-fuelled euphoria fades; Bitcoin down 27% from all-time high

LONDON/NEW YORK – Cryptocurrency prices have fallen sharply in recent weeks and are not expected to rebound soon, with some of the biggest digital currencies erasing nearly all of the gains they made after US President Donald Trump’s election win triggered a wave of excitement across the industry.

Some analysts said the market is likely to remain subdued while waiting for a bullish signal, such as indications that the US Federal Reserve plans to cut interest rates or a clear pro-crypto regulatory framework from the Trump administration.

Bitcoin, the biggest cryptocurrency, was down 5.8 per cent at US$79,363 by 7am in London on Feb 28 (3pm Singapore time). This marks a 27 per cent fall from its all-time high of US$109,241 on Jan 20, the day of Mr Trump’s inauguration.

Hopes for a strategic Bitcoin reserve have faded and Mr Trump’s tariff threats have raised worries about the global economy, thus weighing on demand for speculative assets. Other cryptocurrencies have fallen faster, with Ether down more than 40 per cent since December.

Mr Trump’s own so-called meme coin, which he launched days before his inauguration in a move that sparked conflict-of-interest concerns, is down 80 per cent from a January peak, according to CoinMarketCap data.

He had promised a wave of pro-crypto moves during his campaign, vowing to be a “crypto president”.

He pledged to set up a national Bitcoin stockpile while overhauling crypto regulations and also named crypto proponents Howard Lutnick and David Sacks to prominent posts within his administration.

Under Mr Trump, the Securities and Exchange Commission (SEC) has withdrawn investigations into several crypto companies and dropped a lawsuit against Coinbase, the largest crypto exchange in the US.

But those moves have had little impact on crypto prices, and some industry analysts say expectations about Mr Trump may have been too lofty.

In an executive order during his first week in office, he ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and looking into creating a national crypto stockpile, to the dismay of some investors who had hoped he would instruct the US to start buying Bitcoin.

“That’s increasing all this market uncertainty, which is absolutely not helping Bitcoin at all. Until we get (clarity on a Bitcoin reserve), I can’t see prices recovering significantly,” said Mr James Butterfill, head of research at asset manager CoinShares.

Crypto prices are also facing headwinds from more hawkish monetary policy and Mr Trump’s threat of tariffs, he added.

Since a December peak, almost US$1 trillion (S$1.35 trillion) has been wiped in nominal value from the global crypto market, with total market capitalisation now around US$2.76 trillion, according to CoinMarketCap.

Some investors have had to reset expectations, with preliminary reports from Mr Trump’s new crypto working group not due for at least another month.

“The initial excitement surrounding the Trump administration’s perceived pro-crypto stance appears to be in a phase of recalibration,” said Mr Gabe Selby, head of research at CF Benchmarks, a digital asset index provider.

“For sentiment to shift more decisively, a clearer regulatory framework or a major catalyst – such as additional ETF (exchange-traded fund) approvals or policy shifts – seems to be necessary.”

The SEC approved the first ETFs tied to the spot price of Bitcoin in 2024, which catapulted the cryptocurrency to a new record high.

Still, some market watchers are as bullish as ever.

Standard Chartered analyst Geoff Kendrick is sticking with a target for Bitcoin to hit US$500,000, against a record high of US$109,071, before Mr Trump leaves office. He said central to that is a belief new buyers will enter the market.

Regulatory filings in the US showed that while hedge funds remain the dominant crypto buyers, banks and sovereign wealth funds are buying too, Mr Kendrick added.

Quarterly filings showed that asset managers boosted allocations to US ETFs tied to the price of spot Bitcoin in the fourth quarter of 2024, with Mubadala Investment – an Abu Dhabi sovereign wealth fund – reporting a stake in BlackRock’s iShares Bitcoin ETF worth US$436.9 million. REUTERS