Cryptocurrencies climbed on Tuesday as bullish investor sentiment returned on President Donald Trump’s first full day back in office.
The price of bitcoin was last higher by more than 2% at $106,201.70, according to Coin Metrics. The broader crypto market, as measured by the CoinDesk 20 index, rose 1.6%.
Meanwhile, “Official Trump,” a token launched last week that represents the new U.S. leader, cut its loss over the past 24 hours to 2.5%, after tumbling more than 20% earlier, according to CoinGecko.
The Securities and Exchange Commission on Tuesday afternoon announced that acting Chair Mark Uyeda has launched a “crypto task” force focused on “developing a comprehensive and clear regulatory framework for crypto assets.”
Crypto investors have hailed Trump’s arrival to the White House as a positive moment for the industry. The president has promised to introduce policies supportive of cryptocurrencies, including an accommodating regulatory framework and a federal bitcoin hoard.
Trump’s inauguration Monday lacked any concrete policy announcements regarding the sector. Initially, that appeared to take the wind out of the crypto market’s sails.
Kenneth Lamont, a principal at Morningstar, warned investors not to jump into crypto trading without being properly informed about the risks involved.
“If Donald Trump delivers on his election promises, we could see cryptocurrency markets continue to surge. However, investors would do well to resist the siren call of fear of missing out, and sit on their hands,” Lamont said in emailed comments Tuesday.
Cryptocurrencies are known to be volatile. Bitcoin, the world’s largest digital coin, has previously risen or fallen by thousands of dollars in a single day. Alternative coins, or “altcoins,” like ether and XRP, have proven even more more prone to fluctuations.
“Fear of missing out is not an investment strategy. For many investors, the lure of easy wealth is strong,” Lamont said, adding that retail investors “tend to be poor at market timing, buying and selling at the worst moments.”
—CNBC’s Jeff Cox contributed reporting
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