Dollar Retreats as Bitcoin Surges Ahead of Trump Inauguration Amid Crypto Frenzy
The U.S. dollar slid on Monday as Bitcoin soared to a record high, with markets bracing for significant policy announcements ahead of Donald Trump’s inauguration as U.S. president. Bitcoin surged to an unprecedented $109,071.86 before settling 4.2% higher at $107,120, fueled by softer U.S. inflation data and speculation over multiple Federal Reserve rate cuts.
Trump, who has positioned himself as a “crypto president,” is expected to issue executive orders promoting digital assets, creating heightened anticipation in the cryptocurrency market. Analysts, however, warned of a potential “sell the news” reaction if policy measures face delays.
Dollar Index Falls Amid Market Jitters
The dollar index, which tracks the greenback against six major currencies, dropped 0.36% to 109.02, pulling back from last week’s 26-month high of 110.17. “Markets are awaiting Trump’s executive orders, including potential trade tariffs, which could drive further gains for the U.S. dollar,” said Derek Halpenny, head of global markets research at MUFG.
Despite Monday’s decline, the dollar has climbed 4% since Trump’s election victory in November, buoyed by expectations that his economic policies will fuel growth and inflation. Goldman Sachs strategists project an additional 5% rise in the dollar over the coming months but cautioned that near-term risks remain tied to market expectations for swift tariff implementations.
Yen Strengthens on Bank of Japan Speculation
The Japanese yen hovered near a one-month high amid rumors that the Bank of Japan may raise its policy rate later this week. However, trading volumes were subdued due to the U.S. Martin Luther King Jr. Day holiday, further dampening market activity.
Trump’s Immigration and Tariff Plans Add Uncertainty
During a Sunday rally, Trump reiterated his intention to enforce strict immigration limits, intensifying market uncertainty. Analysts warned that any sign of a more measured approach to trade tariffs could trigger a dollar correction in the weeks ahead.
Bitcoin and Trump Memecoins Dominate Crypto Markets
The cryptocurrency market witnessed unprecedented activity as Bitcoin hit a new high and Donald Trump unveiled an “official” memecoin. Launched Friday evening, the Trump coin rapidly surged in value, briefly reaching a market capitalization of $14 billion and breaking into the top 20 cryptocurrencies by market cap.
Adding to the frenzy, Melania Trump unexpectedly introduced her own cryptocurrency, $MELANIA, which gained instant traction. Priced at over $5, the memecoin reached a market cap of $5 billion shortly after its launch.
Crypto Investors Brace for Volatility
While the Trump memecoins generated excitement, analysts remain cautious about the long-term viability of these digital assets. “The hype is undeniable, but sustainability will depend on utility and ongoing market interest,” said a leading crypto strategist.
Looking Ahead
With Bitcoin setting records, the dollar facing headwinds, and the Trump administration poised to reshape financial markets, investors are preparing for heightened volatility in the weeks ahead. As the global economic landscape evolves, both traditional and digital asset markets will closely watch the unfolding impact of Trump’s policies.
Source : Swifteradio.com
