Crypto and equities markets roared toward new highs on Jan. 21, with Bitcoin making up the bulk of the ground lost during its pullback the day before.
In the US, stock markets were closed on Jan. 20 in observation of Martin Luther King Jr. day, but traders’ optimism over what is believed to be a market and business-climate-friendly Trump presidency was reflected right at the opening bell.
The US Dollar Index continued its decline, pulling back 1.27% from a Jan. 15, two-year high of 110 to currently trade slightly above 108. As 2024 came to a close and right at the start of 2025, market participants’ anxiety over the incoming Trump administration and a handful of other geopolitical tensions were reflected by the sharp rise in US Treasury yields and the DXY. After the smooth transition from former President Biden to a self-declared economics-focused Trump cabinet, the DXY has cooled off, along side Treasury yields.
DXY vs BTC 3-day chart. Source: TradingView
Multiple analysts, CEOs and investment fund managers have gone on the record and shared their optimistic views regarding President Trump’s economic agenda. This optimism can clearly be seen in the S&P 500, DOW and QQQ which have gained 1.21%, 0.82% and 2.79%, respectively. A portion of the rebound in equities can also be attributed to investors’ belief that Trump’s initial plan to implement tariffs on multiple countries has cooled.
SPX, DOW and QQQ 3-day chart. Source: TradingView
Bitcoin strategic reserve or not, BTC bounces back
Following the positive vibes seen across markets, Bitcoin (BTC) also rallied, gaining 3.8% to reach an intra-day high at $107,240. While BTC has failed to eclipse its Jan. 20 all-time high at $109,588, the rebound is likely welcome, especially after anxious investors voiced their disappointment over President Trump making no mention of crypto on Inauguration Day and the absence of an executive order related to a strategic Bitcoin reserve or crypto in general.
Even though Trump may have backtracked on his day 1 promises to the crypto community, many of whom donated millions of dollars to his campaign through lobbies and personal contributions, there was positive news that emerged from the White House on Jan. 21.
As reported by Cointelegraph, the US Securities and Exchange Commission took the first step toward reforming US crypto regulatory policy on Jan. 21 by revealing a new crypto task force purposed to develop a new framework for digital assets. The task force is led by long-time crypto advocate Commissioner Hester Peirce and many investors are already pleased by the appointment of Commissioner Mark Uyeda, who is currently serving as the acting SEC chairman.
Related: 80% of Bitcoin short-term holders back in profit as analyst says 'FOMO in full swing'
Bitcoin also appeared to react positively to commentary from Bank of America CEO Brian Moynihan who said the banks across the world would happily make crypto payments “a real thing” if regulations provided sufficient clarity to do so.
While being interviewed by CNBC at the World Economic Forum in Davos, Switzerland, Moynihan said,
“We have hundreds of patents on blockchain already, we know how to enter the field.”
Taken within a wider context, Moynihan’s comments align with Bitwise chief investment officer Matt Hougan, who has on multiple occasions predicted that “Corporations buying Bitcoin is a much bigger deal than most people think.”
The three sources of insatiable demand in 2025: Companies, ETFs, and Governments. https://t.co/vatSG6wxgF
— Matt Hougan (@Matt_Hougan) January 6, 2025
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.