Market Update 14th January 2025
By Shikha Singh
Bitcoin surged past $95,000, bouncing back from a recent dip, after reports revealed that President-elect Donald Trump plans to sign executive orders supporting cryptocurrency on his first day in office. The Washington Post expects these executive actions to tackle key issues in the crypto industry, such as banking restrictions and the controversial SAB 121 accounting rule.
Trump’s initiative aims to dismantle de-banking practices that have prevented banks from holding Bitcoin in custody. The Securities and Exchange Commission (SEC) rule requires companies to record cryptocurrencies held for clients as liabilities on their balance sheets, a practice that has drawn criticism from the crypto community.
Following the announcement, the market saw a robust recovery after Bitcoin briefly dropped to $89,000, its lowest point in two months. As of the latest update, Bitcoin had climbed back to $95,500. Ethereum mirrored this upward momentum, recovering from a fall below $3,000 to trade at $3,200. Meanwhile, AAVE, an altcoin associated with Trump-backed World Liberty Financial (WLFI), saw a 5% surge in just one hour.
Despite the positive crypto developments, concerns persist about the Federal Reserve’s stance on interest rates. US economic resilience and the potential impact of Trump’s policies on inflation and trade, including tariff and immigration reforms, have investors increasingly anticipating a prolonged rate pause. This has led to rising Treasury yields, which are dampening some of the enthusiasm for crypto, even as Trump vows to make the US the global hub for digital assets with friendly regulations and a rollback of the Biden administration’s crypto crackdown.
The selloff in Treasuries has also contributed to a broader market downturn, with the S&P 500 erasing much of its post-election gains.
Market participants believe that higher bond yields and a stronger dollar are putting significant pressure on risk assets, including cryptocurrencies.
Despite these headwinds, optimism remains high within the crypto community, particularly with Bitcoin accumulator MicroStrategy Inc. continuing to purchase large amounts of Bitcoin. The company recently reported its 10th consecutive weekly buy, bringing its Bitcoin holdings to approximately $41 billion.
At the same time, technical analysts suggest that Bitcoin may be in a “corrective phase,” with charts indicating the possibility of testing support at $87,500. Bloomberg data shows that US spot Bitcoin exchange-traded funds have pulled around $1.6 billion over the past four days.
While challenges remain, many in the crypto space are hopeful that Trump’s pro-crypto stance will drive long-term growth for digital assets.
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