Src: Financial Times
Analysts are warning crypto investors to expect heightened volatility in the crypto market both before and after Donald Trump's inauguration on January 20, 2025.
Trump's administration is viewed as pro-crypto, with potential for friendly regulatory changes, such as more supportive environment for crypto and possibly the establishment of a nation Bitcoin reserve. However, the actual implementation of these policies remains unclear, which can lead to market fluctuations.
Rising inflation etc. are significant concerns for the economy of the United States. Despite strong job growth, inflation remains above target levels, and Trump's planned tariffs on China could intensify these issues. This economic uncertainty can impact investor confidence and cause market volatility.
The resign of Gary Gensler, SEC Chair and potential changes in SEC leadership could impact the regulatory landscape for crypto. Nomination of Paul Atkins by Trump, a crypto supporter, as the new SEC chair could further boost optimism in the market.
Large investors, or "whales" are holding onto their crypto, while retail investors are taking profits, which can impact market dynamics. Furthermore, the recent surge in the price of Bitcoin to over $100,000 has already created significant market momentum.
Despite these factors, there is optimism within the crypto community due to Trump's perceived pro-crypto stance. However, investors are advised to stay cautious and monitor regulatory developments closely to navigate the expected volatility effectively.
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