Red weekend: Bitcoin posted biggest two-day retreat since the US election

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The crypto community has tended toward uncertainty about Trump’s promised crypto policies, causing Bitcoin to decline over the weekend. The crypto asset had soared to new all-time highs after Trump won the presidential elections on November 5.

Trump’s campaigns focused on the crypto community before the elections. The president-elect spoke at the Bitcoin Conference 2024, the world’s largest Bitcoin gathering. He promised the crypto community that he would end the war on crypto initiated by the Biden-Harris administration. He also promised a more crypto-friendly environment and other high-profile agendas.

However, traders are now becoming cautious about Trump’s incoming administration and whether he will deliver on his promises to the crypto industry. These uncertainties include the timeframe when Trump will deliver on his crypto pledges and whether some of them are still possible. Case in point, the establishment of a Bitcoin reserve.

Bitcoin declines by 3% over the weekend

Over the weekend, Bitcoin shed off 3% and retailed at $90,100. However, the asset shows signs of recovery after a 1.13% surge in the last 24 hours and an overall 13.16% rise in the last seven days. 

the uncertainty extends to monetary policies as traders withdraw their expectations on possible rate cuts in December after two consecutive cuts in the last two meetings. The uncertainty challenges crypto investors since liquidity conditions affect speculative demand for crypto assets, including Bitcoin.

The crypto industry has gone through turbulent times in the hands of the U.S. Securities and Exchange Commission, especially after the collapse of the FTX exchange. The U.S. SEC has particularly targeted centralized crypto exchanges under the Biden-Harris administration. 

Industry experts have criticized the U.S. SEC’s regulatory enforcement strategies under the current chair, Gary Gensler. Although Trump promised to fire him immediately he assumes office on January 20, 2025, it is still unclear who will take over the vacancy.

Strategists anticipate crypto legislation approval under Trump’s regime

A note by JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou predicts that Trump’s incoming administration may approve crypto legislation soon. The approval will transform regulatory oversight from a more offensive approach to a more collaborative relationship, according to the note.

The team also mentioned a high probability of banking institutions beginning to interact with digital assets under Trump’s administration. The note highlighted the possibility that the administration may approve a more diversified investment environment for investors through the introduction of exchange-traded fund offerings for other digital assets besides Bitcoin and Ethereum.

The note also identified the looming crisis over regulatory uncertainty revolving around digital assets. The team noted that Trump will create a clearer crypto environment that will likely catalyze capital inflow and funding from venture capital firms, public offerings, mergers, and acquisitions.

Bitcoin is trading at $91,683 after enduring its slowest weekend since the U.S. elections on November 5. According to data aggregator CoinMarketCap, the asset has risen by 1.24% after shedding 3% over the weekend. However, Bitcoin has surged by 12.96% in the last seven days.

Data from ETF tracker Sosovalue shows that Bitcoin ETFs experienced outflows worth 770 million on Thursday and Friday last week after recording positive flows worth close to $5 billion for six consecutive business days starting from November 6.

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