Cryptocurrencies rose on Tuesday after bullish investor sentiment returned on President Donald Trump’s first full day back in power.
The price of bitcoin was last up 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 US leader, has cut its loss to 2.5% in the past 24 hours after previously falling more than 20%, according to CoinGecko .
The Securities and Exchange Commission announced Tuesday afternoon that acting Chairman Mark Uyeda has launched a “crypto task force” aimed at “developing a comprehensive and clear regulatory framework for crypto assets.”
Crypto investors have hailed Trump’s arrival at the White House as a positive moment for the industry. The president has promised to introduce policies that support cryptocurrencies, including an accommodative regulatory framework and a federal bitcoin stockpile.
Trump’s inauguration on Monday lacked concrete policy announcements regarding the sector. Initially, this seemed to take the wind out of the sails of the crypto market.
Kenneth Lamont, director at Morningstar, warned investors against diving into crypto trading without being properly informed about the risks involved.
“If Donald Trump delivers on his election promises, we could see the cryptocurrency markets continue to rise. However, investors would do well to resist the siren call of fear of missing out and sit on their hands,” Lamont said in an emailed comment Tuesday.
Cryptocurrencies are known to be volatile. Bitcoin, the world’s largest digital currency, has previously risen or fallen by thousands of dollars in a single day. Alternative coins, or ‘altcoins’, such as ether And XRP, have proven to be even more sensitive to fluctuations.
“The fear of missing out is not an investment strategy. For many investors, the allure of easy riches is strong,” Lamont said, adding that retail investors “tend to be bad at market timing, buying and selling at the worst times.”
— CNBC’s Jeff Cox contributed reporting