WASHINGTON — Bitcoin climbed to a fresh record as the United States prepares to inaugurate Donald Trump to his second presidential term, following a weekend during which his own newly-launched digital token rattled crypto markets.
The original digital asset gained as much 5.5% to US$109,241 on Monday. The rally came after Trump and his wife Melania unveiled memecoins, with Trump's reaching a market capitalisation of more than $15 billion on Sunday before declining sharply.
Bitcoin and other major tokens like Ether and XRP rose rapidly on Monday morning in London, with traders counting down the hours until Trump once again assumes control of the White House. Bloomberg News previously reported that he’s considering an executive order designating the asset class a "national priority."
The new Trump tokens initially blindsided crypto markets by diverting investment flows from other tokens and drew sharp criticism even from some industry executives. Yet investors eventually embraced the notion that Trump's move will give him further incentive to embrace crypto-friendly policies.
Trump became an ardent supporter of the digital-assets industry on the campaign trail, after once having branded Bitcoin a scam. He has pledged to make the US the world’s crypto capital through policies that include the establishment of a strategic Bitcoin stockpile.
Memecoin mania
The tokens debuted by the Republican and his team have further accelerated Bitcoin's momentum as retail traders look for his administration to "prioritise and reaffirm his commitment to the crypto industry," said Ben El-Baz, managing director of HashKey Global.
Memecoins are a kind of cryptocurrency with questionable intrinsic value and high volatility that rely on social media tailwinds to drive up their price. Trump's token briefly rattled the digital-asset market on Monday morning in Singapore, sapping flows from Bitcoin and smaller tokens while drawing criticism from industry executives, as well as immediate rebuke from government watchdogs.
An 80% share of the Trump token is owned by a Trump Organisation affiliate called CIC Digital LLC, and a related entity called Fight Fight Fight LLC — whose name echoes the words Trump mouthed after a bullet grazed his ear during the campaign trail. Their holdings will be unlocked over a three-year period.
Fine print
According to the site, 200 million of the tokens immediately became available, a supply that will grow to 1 billion over three years. The memecoin was trading at $57.40 as of 8.36am in London on Monday, according to CoinMarketCap data.
The small print on its website states the token is not intended to be an "investment opportunity, investment contract, or security of any type." Major exchanges like Coinbase Global Inc and Binance Holdings Ltd nonetheless said during the weekend that they intended to list the token on their platforms. Robinhood Markets Inc announced in a post on X, formerly Twitter, on Monday that it too had listed the token.
Jonathan Yark, senior quantitative trader at crypto market maker Acheron Trading, said the memecoin "confirmed that digital assets and, most importantly, Bitcoin will have the backing of the US which presents significant opportunity."