Bitcoin has retreated after a series of gains that brought prices within striking distance of the historic $100,000 mark, amid warnings that investors' optimism over President-elect Donald Trump's crypto policies has become overblown.
The cryptocurrency fell to $95,776 on Sunday, after needing just $300 to reach the six-figure threshold on Friday. The cryptocurrency struggled to gain traction near $97,000 in early Asian trading on Monday, setting a bearish tone in the broader crypto market.
Matt Maley, chief market strategist at Miller Tabak + Co., said investors are worried the cryptocurrency will have to take a breather now that it’s nearing $100,000, and that the optimism surrounding bitcoin has become too strong.
Wall Street and the industry at large view the incoming Trump administration as a tailwind for cryptocurrencies. The total value of the digital asset market has risen by nearly $1 trillion since the Republicans won on November 5.
Trump's Business
Trump has promised friendlier regulations and pledged to create a national reserve of Bitcoin under what has become known as the Trump trade, though there are many question marks about the timeline for implementation and the feasibility of creating a Bitcoin reserve.
“I see a growing bias towards the short side as we approach the $100,000 mark,” said David Lawant, head of research at cryptocurrency exchange FalconX. “This suggests we could see consolidation around this level in the near term, before a sustained breakout above it.”
Traders have seized on hopes of friendly U.S. policies to push the currency close to $100,000, a symbolic level for crypto supporters but rejected by skeptics who see little intrinsic value in digital assets.
Talks between Cantor and Tether
The latest developments include a Bloomberg News report that Cantor Fitzgerald LP is in talks with Tether Holdings Ltd. about getting Tether’s support for its planned multibillion-dollar program that would allow it to lend money to customers who use bitcoin as collateral.
Cantor CEO Howard Lutnick is co-chair of Trump's transition team, and Trump also nominated him to lead the Commerce Department.
The transition team also held discussions about whether to create the first White House position dedicated to digital assets policy.
Cash has poured into US exchange-traded funds that invest directly in bitcoin since Trump’s victory, and the funds have now raised $107 billion since launching in January.
The 12-strong group of ETFs, from issuers including BlackRock and Fidelity Investments, is among the most successful fund class launches in history.
Bitcoin has been so high since the election that it is bound to stop rising, said Stephane Ouellette, CEO of cryptocurrency investment firm Front Financial Inc. However, this is not a pullback, we are just back to last week’s levels.
