Bitcoin Approaches Record High as US Market Regulator Announces Plan to Revamp Crypto Laws

Bitcoin reached a record high of $109,071 on Monday when Trump, who has promised to be a "crypto president," was sworn in, but fell when crypto was not

Bitcoin, the world's largest cryptocurrency by market capitalization, approached Monday's record high during choppy trading on Tuesday, as the top U.S. market regulator announced an effort to revamp the sector's laws.

Bitcoin hit a record high of $109,071 on Monday as Trump, who has pledged to be a "crypto president," was sworn in, but then slid as crypto was not included in a flurry of activity on Day One.

Bitcoin rose 3.8%, while the second-largest cryptocurrency, ether, gained 1.4%, as the market recovered from some of its disappointment.

The acting head of the Securities and Exchange Commission said on Tuesday the agency had created a task force to design a regulatory framework for digital assets, in the first major move by the Trump administration to overhaul crypto policy.

"The president has moved quickly on his agenda," Coinbase Chief Legal Officer Paul Grewal said in a phone interview. "The SEC has made it clear they understand that and want to be a part of that."

But some analysts cautioned that volatility is likely to continue until Trump's administration announces the specific rules that the crypto industry has been eagerly awaiting.

"The digital asset market was left disappointed not to have been mentioned in the inauguration speech or the Day One executive actions," said Geoffrey Kendrick, global head of digital assets research at Standard Chartered.

"I expect Bitcoin to drift lower until there is an announcement from the Trump administration on digital assets. A drop back below $100,000 now seems almost inevitable."

Trump's own $TRUMP-branded "meme coin," which debuted late on Friday, fell on Tuesday, according to cryptocurrency price tracker CoinMarketCap.

A separate Trump-linked cryptocurrency venture, World Liberty Financial, said on Monday it had completed an initial token sale for $300 million and will issue more tokens. Trump has pledged to delegate asset management to his children, but ethics experts have flagged his cryptocurrency ventures as creating conflicts of interest and stoking speculation in a volatile asset class.

The SEC's new task force will help draw clear regulatory lines, provide registration paths, develop disclosure frameworks and deploy enforcement resources, the office of Acting SEC Chair Mark Uyeda said on Tuesday.

Reuters reported earlier this month that Uyeda and fellow Republican Commissioner Hester Peirce were preparing to launch the cryptocurrency policy push.

Trump is also expected to announce executive orders in the coming days to further boost Bitcoin use, according to Reuters and other media outlets.

Jeremy Allaire, CEO of stablecoin issuer Circle, told the Reuters Global Markets Forum at the start of this week's World Economic Forum annual meeting in Davos that he expects imminent executive orders that will allow banks to trade cryptocurrency, offer crypto investments to wealthy clients and hold it in portfolios.