Cryptocurrency has been in the spotlight this week, as President Donald Trump’s administration has introduced significant yet polarising developments for the digital asset space. While his inaugural address on January 20th made no mention of crypto, subsequent executive actions and news have sparked discussions across the industry.
Trump’s executive order „Strengthening American Leadership in Digital Financial Technology“ set the tone for the week. This landmark directive establishes a high-level working group, chaired by crypto advocate David Sacks, tasked with evaluating the creation of a Strategic Digital Asset Reserve and developing a regulatory framework for stablecoins. While details remain scarce, the move signals a seismic shift in US crypto policy, particularly with the inclusion of seized digital assets in the national reserve discussion.
Adding to the optimism, Senator Cynthia Lummis was also appointed Chair of the Senate Banking Subcommittee on Digital Assets, and the SEC rescinded the contentious SAB 121, allowing banks to custody digital assets without treating them as liabilities. This regulatory shift is expected to unlock billions of sidelined institutional cash, making cryptocurrencies a more viable investment for traditional finance.
Despite these developments, BTCs price action indicates that the market is still digesting the implications. BTC, which hit a new all-time high (ATH) of USD 109,000 on the morning of Trump’s inauguration, has since retraced slightly and is set to close the week at around USD 105,000, up 5% on the week. Meanwhile, Solana (SOL) posted impressive weekly gains of over 22% on the week, consolidating around USD 260, driven by memecoins such as TRUMP and MELANIA, although it remains below last week’s ATH of USD 295.
On the macro side, uncertainty surrounding Trump’ s proposed 10% tariffs on China, set to take effect on February 1st, introduced fresh uncertainty to global trade, leaving USD largely directionless for most of the week amid ongoing policy developments. However, tempered inflation expectations supported by last week’s data and broader risk on sentiment driving new highs in equities this week have pushed the USD toward a weaker footing to close the week, with DXY down 0.6% on the day. Overnight, the Bank of Japan (BOJ) raised its benchmark borrowing rate to a 17-year high as inflation reached 3.6% year-over-year, strengthening the yen by 0.4% on the day. Despite the BOJ’s hawkish stance, risk assets including Bitcoin showed resilience with BTC trading steadily above USD 105,000 as market attention remains increasingly focused on the policy under President Donald Trump.
While the markets digested a flurry of news this week, the long-term implications are bullish. As banks prepare to enter the space and the working group evaluates a national digital asset stockpile, we are set for a transformative year in crypto. As the initial “Trump trade” euphoria gives way to measured optimism, both bitcoin and traditional assets are likely to see steady inflows in the coming weeks. However, the next big test lies ahead, with the Federal Reserve’s decision next week and whether Trump’s administration follows through on its ambitious crypto agenda.
For now, the fundamentals remain strong, and crypto markets look well supported as we head into this pivotal period.
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