Bitcoin and Equities Markets Roared Toward New Highs on Jan. 21, with Bitcoin Making Up the Bulk of the Ground Lost During Its Pullback the Day Before

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Stock and crypto markets both advanced on Jan. 21, with Bitcoin making up the majority of the ground lost during its pullback the day before.

In the US, stock markets were closed on Jan. 20 to mark Martin Luther King Jr. day, but traders’ optimism over what is widely believed to be a market and business-climate-friendly Trump presidency was evident from the opening bell.

The US Dollar Index continued to pull back, dropping 1.27% from a Jan. 15 two-year high of 110 to now trade just above 108. As 2024 drew to a close and 2025 began, market participants’ anxiety over the incoming Trump administration and several other geopolitical tensions was reflected by a sharp rise in US Treasury yields and the DXY. Following the smooth transition from former President Biden to a Trump cabinet that has self-declared a focus on economics, the DXY has cooled off, along side Treasury yields.

DXY vs BTC 3-day chart. Source: TradingView

Several analysts, CEOs and investment fund managers have publicly shared their optimistic views regarding President Trump’s economic agenda. This optimism can be clearly seen in the S&P 500, DOW and QQQ which have gained 1.21%, 0.82% and 2.79%, respectively. A portion of the rebound in equities can also be attributed to investors’ belief that Trump’s initial plan to implement tariffs on multiple countries has cooled.

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SPX, DOW and QQQ 3-day chart. Source: TradingView

Bitcoin strategic reserve or not, BTC bounces back

Following the positive vibes seen across markets, Bitcoin (BTC) price action appeared to react positively to several developments on Jan. 21, even though the U.S. government remained partially shut down due to a disagreement over raising the debt ceiling.

Even though Trump may have broken his day 1 promises to the crypto community, many of whom donated millions of dollars to his campaign through lobbies and personal contributions, there was positive news that emerged from the White House on Jan. 21.

As reported by Cointelegraph, the U.S. Securities and Exchange Commission took the first step toward reforming U.S. crypto regulatory policy on Jan. 21 by revealing a new crypto task force purposed to develop a new framework for digital assets. The task force is led by long-time crypto advocate Commissioner Hester Peirce and many investors are already pleased by the appointment of Commissioner Mark Uyeda, who is currently serving as the acting SEC chairman.

Related: 80% of Bitcoin short-term holders back in profit as analyst says 'FOMO in full swing'

Bitcoin also appeared to react positively to commentary from Bank of America CEO Brian Moynihan who said the banks across the globe would happily make crypto payments “a real thing” if regulations provided sufficient clarity to do so.

While being interviewed by CNBC at the World Economic Forum in Davos, Switzerland, Moynihan said,

“We can make it happen. We have the technology. We have the capability. We have the desire to do it. But we need the government to give us the clarity on the rules and regulations.”

Taken within a wider context, Moynihan’s comments align with Bitwise chief investment officer Matt Hougan, who has on multiple occasions predicted that “Corporations buying Bitcoin is a much bigger deal than most people think.”

The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. This article does not contain investment advice or recommendations. Every investment and trading move carries a risk. You should always conduct your own research when making an investment decision.