Donald Trump's Inauguration as US President Impacts the Highly Volatile Cryptocurrency Market Which Experienced a Sharp Pullback on Tuesday

Despite a promising start with Bitcoin reaching an all-time high of $109,071 on Monday, the world's largest cryptocurrency retraced its steps and was last

Donald Trump's inauguration as US president impacted the cryptocurrency market on Tuesday, with sharp declines being observed.

Bitcoin and other digital assets, including the newly launched Trump-branded token, experienced a steep drop in value.

After reaching an all-time high of $109,071 on Monday, the world's largest cryptocurrency retraced its steps and was last trading at $101,705.40, according to news agency Reuters.

Meanwhile, the value of the meme coin, named after Trump, also saw a steep decline of nearly 50% - dropping from a peak of $74.59 to $34.4.

The sharp decline in the crypto market followed Trump's inaugural speech, which highlighted his plans for trade tariffs, amendments to immigration policy, energy deregulation, and a reprieve for TikTok - but notably lacked any mention of cryptocurrencies.

This absence left many in the crypto market disappointed, considering the anticipation surrounding the new Trump administration's stance on digital assets.

"I think in the short term there's a chance this could be a sell-the-news event," said Matthew Dibb, chief investment officer at crypto asset manager Astronaut Capital, regarding crypto investors' expectations for some executive actions to be rolled out during Trump's first day in office.

"The market has some great expectations about a bitcoin strategic reserve and a loosening of regulations around digital assets, but it's more likely these developments will be drip-fed over a series of months rather than days. Bitcoin has already retreated ... We are expecting further volatility here and likely a selloff," Dibb added.

However, his administration was widely anticipated to introduce significant regulatory changes or even lay the groundwork for a "Bitcoin strategic reserve" that could bolster the cryptocurrency's legitimacy in the eyes of institutional investors.

Trump has tapped Mark Uyeda, a Republican member of the US Securities and Exchange Commission, to be acting chair of the agency and plans to nominate former SEC Commissioner Paul Atkins to run the agency permanently.

Atkins is widely expected to end a crypto crackdown led by former President Joe Biden's Democratic SEC chair Gary Gensler and Uyeda has criticized the SEC for failing to offer guidance on how crypto companies can register with the agency.

Trump's involvement in the cryptocurrency market has also raised concerns over potential conflicts of interest.

Trump's launch of the $TRUMP token and the $MELANIA token, for First Lady Melania Trump, shortly before his inauguration has drawn attention from ethics experts and industry insiders.

According to its website, 80% of Trump coin's tokens are owned by CIC Digital, an affiliate of Trump's business, and another entity called Fight, Fight, Fight.