Cryptocurrencies climbed Tuesday as bullish investor sentiment returned on President Donald Trump’s first full day back in office.
The price of bitcoin was last up more than 2% at $106,201.70, according to Coin Metrics. The broader crypto market, as measured by the CoinDesk 20 Index, rose 1.6%.
Meanwhile, “Official Trump,” a token launched last week representing the new US leader, reduced its loss over the past 24 hours to 2.5%, after falling more than 20% earlier, according to CoinGecko.
The Securities and Exchange Commission announced Tuesday afternoon that its acting chairman, Mark Uyeda, has launched a “cryptocurrency working group” focused on “developing a comprehensive and clear regulatory framework for crypto assets.”
Crypto investors have hailed Trump’s arrival at the White House as a positive moment for the industry. The president has promised to introduce pro-cryptocurrency policies, including an accommodative regulatory framework and a federal bitcoin hoard.
At Trump’s inauguration on Monday, there were no concrete policy announcements regarding the sector. Initially, this seemed to take the breath away from the crypto market.
Kenneth Lamont, director of Morningstar, has warned investors not to jump into crypto trading without being properly informed of the risks involved.
“If Donald Trump keeps his election promises, we could see cryptocurrency markets continue to soar. However, investors would do well to resist the siren call of fear of missing out and sit idly by.” , Lamont said in emailed comments Tuesday.
Cryptocurrencies are known to be volatile. Bitcoin, the world’s largest digital coin, has already gone up or down by thousands of dollars in a single day. Alternative coins, or “altcoins,” like ether And XRP, proved even more prone to fluctuations.
“Fear of missing out is not an investment strategy. For many investors, the lure of easy wealth is strong,” Lamont said, adding that retail investors “tend to be bad at market timing, buying and selling at the worst times.
—CNBC’s Jeff Cox contributed reporting
