- Bitcoin experienced significant volatility around Trump’s inauguration, reaching a new all-time high before dropping sharply when cryptocurrency went unmentioned in his speech and Republican letter.
- The market turbulence triggered massive liquidations totalling US$758 million across cryptocurrencies, with Bitcoin accounting for US$335 million in closed long and short positions.
- Trump’s proposed trade tariffs could create additional market pressure by potentially raising consumer prices and disproportionately affecting lower-income households.
Bitcoin went on a rollercoaster ride in the past day: In anticipation of Donald Trump’s inauguration on Monday US Time, the largest crypto rallied by 8% to a new all-time high (ATH) of US$109,114 (AU$173,771) only to fall back to US$102,191 (AU$162,779) at the time of writing.
Related: Communist Threat? Coinbase CEO Urges Global Crypto Revolution For “Economic Freedom”
The drop of almost 7% came as Trump failed to mention crypto or Bitcoin during his inauguration speech; with it, eliminating any hopes that a Bitcoin reserve is a day-one priority for the president.
Moreover, a letter sent to Republicans also omitted any mention of crypto or Bitcoin:
Most users on platform X said they weren’t too worried about the absence of a crypto mention and that they’re still hopeful for the Strategic Bitcoin Reserve to go ahead eventually.
And of course, even if the federal government isn’t making a move anytime soon, several US States are, as reported earlier.
Traders Liquidated, Shorts and Longs Wrecked
As could be expected with such wild swings to the upside and downside, many traders have been liquidated. According to coinglass, around 250k traders have been liquidated, accounting for US$758 million (AU$1.2 billion) in forced sell-offs.
The liquidations in Bitcoin reached US$335 million (AU$537 million) with US$197 million (AU$316 million) in long positions and US$138 million (AU$221 million) in shorts wiped out. Meanwhile, Ethereum saw only US$94 million (AU$150 million) liquidated, with US$57 million (AU$91 million) longs and US$36 million (AU$57 million) in shorts exited.
Traders of Donald Trump’s memecoin TRUMP were not spared, with US$59 million (AU$94 million) in liquidations: US$34 million (AU$54 million) long positions and US$25 million (AU$40 million) short positions were affected.
Trump Tariffs Could Cause Further Market Pressure
Then there are also Trump’s looming trade tariffs which he had threatened to impose during his second term.
Analysts at Bitfinex pointed out that a move to significantly increase tariffs for goods imported to the US could “lead to substantial price hikes for goods not widely produced domestically, including clothing and consumer electronics”.
Related: Aussie Analyst Says Trump Memecoin Launch Changed Crypto Forever
These tariffs are likely to disproportionately impact lower-income households, intensifying financial strain and raising concerns about economic fairness.
While recent trends in import prices suggest a positive outlook for inflation control, the potential introduction of new tariffs could disrupt this stability, creating additional economic challenges. The Fed must weigh the broader implications of such measures, particularly their regressive effects on lower-income households.
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