Bitcoin, the world’s best-known cryptocurrency, has hit a fresh record high ahead of Donald Trump’s inauguration in Washington DC later today, while the dollar dipped.
The president-elect has promised a crypto-friendly administration, pledging to make the US the “crypto capital of the planet” and to create a “strategic national bitcoin reserve” during his election campaign.
Trump has launched his own crypto currency – which briefly tanked over the weekend when his wife Melania also launched a multi-billion dollar cryptocurrency meme coin.
Meanwhile, bitcoin has risen by 4% and hit a new record high of $109,071 during Asian trading. It reversed earlier losses when it dropped to nearly $100,000 when the Melania Trump-backed cryptocurrency launched.
The dollar, which has strengthened against other currencies in recent months, dipped by 0.3% against a basket of major currencies today. The pound and the euro both rose by 0.4% against the greenback.
Asian stocks have pushed higher, with Japan’s Nikkei gaining 1.17% and Hong Kong’s Hang Seng up 1.8%.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "A good part of Trump trade has already happened – the small and mid-caps rallied, energy and financials outperformed and cryptocurrencies touched the sky. Therefore, the first week under Trump may not bring a lot of surprises... (but it may as well!) The WSJ writes that Donald Trump has already prepared 100 – yes 100 – executive orders to take swift action after today’s inauguration, including an order to make crypto a policy priority and giving insiders of the crypto market a good voice within his administration.
"Trump launched a cryptocurrency of his own on the Solana blockchain and the coin gained up to 600% in three days reaching a $15bn capitalization before easing – a little bit – also sending Solana to a fresh record high.
"But beyond that optimism, Trump policies are expected to be a double-edged sword. His pro-growth policies and deregulation are expected to benefit to the US economy but his tariff policies will certainly lead inflation higher and soften the Fed doves’ hands for easing policy. In addition, exploding debt levels will likely further push the borrowing costs higher."
Trump has promised to mark day one of his presidency with a barrage of executive orders targeting illegal immigration, transgender rights and other rightwing priorities.
ING analyst Chris Turner said: "Today, all eyes are on Donald Trump’s inauguration as the 47th president of the US. Financial markets are bracing for a flurry of executive orders ranging from immigration to energy and possibly trade. On tariffs, betting markets are marginally priced in favour of tariff action against China and Mexico this week. After four months of being bought on the rumour, the dollar is now exposed to some selling on the fact – but there should be plenty of dollar buyers on dips."
The latter referred to the practice of buying a weaker asset and selling it once it has reached a new high.
The agenda • 5pm GMT: US Inauguration of Donald Trump in Washington DC
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