By Tom Westbrook, Elizabeth Howcroft, and Chibuike Ogoh
NEW YORK/SINGAPORE/PARIS (Reuters) – Bitcoin, the world's largest cryptocurrency, approached the previous session's record high on Tuesday in choppy trading as the top U.S. markets regulator unveiled a plan to overhaul the sector's rules.
It reached a record high of $109,071 on Monday when Trump, who has pledged to be a “crypto president,” was sworn in, but sank when cryptocurrencies were not included in a flurry of executive actions on day one.
Bitcoin prices rose 3.8%, while the second-largest cryptocurrency rose 1.4% as the market shook off some of that disappointment.
The Securities and Exchange Commission's new leadership said Tuesday it has created a task force to develop a regulatory framework for digital assets, the first major step by the new Trump administration to reform cryptocurrency policy.
“The president has moved quickly on his agenda,” Paul Grewal, chief legal officer at Coinbase (NASDAQ:), said in a phone interview. “The SEC has made it clear that they understand that and they want to be a part of that.”
However, some analysts have warned of volatility until the Trump administration begins announcing concrete policies that have been long-awaited by the cryptocurrency industry.
“The digital asset market is disappointed not to have been mentioned in the inaugural address or day one executive orders,” said Jeffrey Kendrick, global head of digital asset research at Standard Chartered (OTC):
“I think Bitcoin will eventually end up lower as long as we don't hear from Trump on the digital asset. A drop below $100,000 seems inevitable.”
The Trump-branded “meme coin,” which launched on Friday evening, fell on Tuesday, according to cryptocurrency price tracking site CoinMarketCap.
World Liberty Financial, a separate cryptocurrency project linked to Trump, also said Monday that it had completed an initial token sale, raising $300 million, and that it would issue additional tokens. Trump has pledged to hand over management of his assets to his children, but ethics experts have criticized his cryptocurrency ventures as raising conflict of interest issues and stoking speculation in the volatile asset class.
The agency's new task force will help draw clear regulatory lines, provide paths to registration, craft disclosure frameworks and deploy enforcement resources, the office of acting SEC Chairman Mark Ueda said Tuesday.
Reuters reported earlier this month that Ueda and fellow Republican Commissioner Hester Peirce are about to begin reforming cryptocurrency policy.
Trump is also still expected to issue executive orders in the coming days that will boost Bitcoin adoption, Reuters and other media outlets have reported.
Speaking to the Reuters Global Markets Forum at the start of the World Economic Forum's annual meeting this week in Davos, Jeremy Allaire, CEO of stablecoin issuer Circle, said he expects imminent executive orders that could allow banks to trade cryptocurrencies, offer crypto investments to wealthy clients and… Keep them in wallets.
