TL;DR
- The crypto market suffered a severe drop, with liquidations exceeding $960 million, after weeks of optimism driven by Donald Trump’s victory.
- Bitcoin was the most affected asset, with losses of over $268 million in long positions, while Ethereum and XRP also experienced significant losses.
- Despite the crash, the Trump administration has created a working group to review cryptocurrency regulations, although some key agencies have been excluded, which creates uncertainty.
The crypto market has experienced a sharp drop, resulting in liquidations exceeding $960 million. This crash follows several weeks of optimism fueled by Donald Trump’s electoral victory, which had generated expectations of a favorable environment for cryptocurrencies.
In particular, Bitcoin reached a price of $109,000 in mid-January, but investor confidence weakened when Trump failed to mention cryptocurrencies in his inauguration speech. This led to a widespread market correction.
Bitcoin has been the most affected asset in this wave of liquidations. The value of long BTC positions suffered losses exceeding $268 million, while Ethereum and XRP also saw liquidations above $100 million. The HTX platform recorded a $98.46 million liquidation in a single BTC-USDT order, standing out as the largest during this downturn.
The Crypto Market Awaits Updates from the Trump Administration
Despite the price drop, cryptocurrency market authorities are closely watching the decisions made by Trump’s government. Although the president did not mention the industry in his inaugural speech, the administration has taken steps by creating a working group focused on cryptocurrency regulations.
This team, led by David Sacks, Special Advisor for AI and Cryptocurrencies, aims to review current policies and present recommendations within the next six months. However, several market participants have pointed out that this group does not include key agencies like the Federal Reserve and the FDIC, which could limit its effectiveness.
With the recent market correction, analysts suggest that this could be a natural market correction following Bitcoin’s rapid rise. However, the lack of regulatory clarity remains a concern. The next few months will be crucial in determining whether Trump’s policies will drive a sustained recovery for cryptocurrencies or if regulatory uncertainty will continue to affect the market
