Bitcoin reached a historic milestone on January 20, 2025, briefly touching an all-time high of $109,350.72 during a volatile session coinciding with Donald Trump’s inauguration as President. However, the cryptocurrency later reversed its gains, dropping by over 2% to settle at $103,558.38, reflecting a classic “buy the rumor, sell the news” scenario.
Market Sentiment Soars on Speculative Optimism
The anticipation of Trump’s inauguration created a bullish wave in the crypto market. Traders widely speculated that the incoming administration would herald a crypto-friendly era, with expectations of groundbreaking executive orders such as the establishment of a crypto advisory council or a national Bitcoin reserve. These hopes fueled Bitcoin’s ascent to its record high during overnight trading.
According to Gracy Chen, CEO of crypto exchange Bitget, rumors of Bitcoin being declared a national interest significantly boosted market confidence. However, Chen emphasized that while Bitcoin’s rally was notable, the emergence of Trump-family meme coins siphoned off capital that could have propelled Bitcoin even higher.
The Trump Meme Coin Craze
Adding fuel to the market frenzy was the unexpected launch of the “Official Trump” meme coin and the “Melania” coin over the weekend. The Trump coin quickly soared to a staggering $10 billion market cap, while the Melania coin garnered a respectable $7.2 billion in trading volumes. These meme coins, hosted on the Solana network, not only attracted massive trading activity but also validated the narrative of a supportive administration for cryptocurrency markets.
Joel Kruger, market strategist at LMAX, described the launches as symbolic gestures signaling the administration’s openness to embrace even the most speculative corners of the crypto market. “Backing meme coins could be seen as the boldest statement yet of support for the industry,” Kruger noted.
Meme Coins Impact Broader Crypto Market
Despite the euphoria around meme coins, the broader crypto market faced headwinds, with the CoinDesk 20 index dropping 3.6% by Monday afternoon. Solana, which benefited significantly from hosting the Trump meme coin, experienced a sharp 9% decline after a weekend rally of 14%.
Noelle Acheson, economist and author of the “Crypto is Macro Now” newsletter, viewed the meme coin launches as net positives for the industry, interpreting them as a sign of innovation and growth potential under the new administration.
What’s Next for Bitcoin?
The historic high of $109,000 has reignited discussions about Bitcoin’s next major target, with analysts forecasting a potential extension to $130,000 in the coming months. As the Trump administration’s crypto policies unfold, the market will closely monitor regulatory moves and their influence on Bitcoin and other cryptocurrencies.
With a promising start to 2025, the crypto market appears poised for transformative growth. However, as the volatile session on inauguration day demonstrated, sharp swings remain an integral part of the cryptocurrency narrative.
