Bitcoin gains as US regulator gives crypto its first policy win

NEW YORK – Bitcoin, the world’s largest cryptocurrency, approached the previous session’s record high on Jan 21 in choppy trading as the top US markets regulator unveiled a plan to overhaul rules for the sector.

Bitcoin hit a record high US$109,071 on Jan 20 when US President Donald Trump, who has pledged to be a “crypto president”, was sworn in, but sank when crypto was not included in a flurry of executive actions on Day One.

Bitcoin prices rose 3.8 per cent on Jan 21 while Ethereum, the second-largest cryptocurrency, gained 1.4 per cent as the market shook off some of that disappointment.

The Securities and Exchange Commission’s (SEC) new leadership said on Jan 21 that it had created a task force to develop a regulatory framework for digital assets, the first major move by Mr Trump’s new administration to overhaul crypto policy.

“The President has moved quickly on his agenda,” Coinbase chief legal officer Paul Grewal said in a phone interview. “The SEC has made it clear they understand that and want to be a part of that.”

But some analysts warned of volatility until Mr Trump’s administration starts to announce concrete policies long hoped for by the crypto industry.

“The digital asset market is disappointed to not have been mentioned in the inauguration speech or Day One executive orders,” said Mr Geoffrey Kendrick, global head of digital assets research at Standard Chartered.

“I suspect Bitcoin will end up going lower so long as we get no news from Trump on digital assets. A break back below US$100,000 seems inevitable.”

Trump’s own $Trump-branded “meme coin” – launched on Jan 17 – fell on Jan 21, according to cryptocurrency price tracker CoinMarketCap.

World Liberty Financial, a separate Trump-linked crypto project, also said on Jan 20 that it had completed an initial token sale, raising US$300 million (S$406 million) and that it would issue additional tokens.

Mr Trump has pledged to hand management of his assets to his children, but ethics experts have criticised his crypto ventures as raising conflict of interest issues and stoking speculation in a volatile asset class.

Acting SEC chair Mark Uyeda’s office said on Jan 21 that the agency’s new task force would help to draw clear regulatory lines, provide paths to registration, craft disclosure frameworks and deploy enforcement resources.

Reuters reported earlier in January that Mr Uyeda and fellow Republican commissioner Hester Peirce were poised to kick-start the crypto policy overhaul.

Mr Trump is also still expected to issue executive orders in coming days that will further promote Bitcoin adoption, Reuters and other media outlets have reported.

Speaking to Reuters Global Markets Forum at the start of this week’s World Economic Forum’s annual meeting in Davos, Mr Jeremy Allaire, chief executive of stablecoin issuer Circle, said he expected imminent executive orders that could allow banks to trade crypto, offer crypto investments to wealthy clients and hold it in portfolios. REUTERS