5 min readBitcoin is rising on Wednesday, up 2% over the past 24 hours and extending an overnight recovery towards 105k.
Bitcoin had reached an all-time high of above 109k ahead of Trump’s inauguration but fell back to the 100K level after Trump failed to mention Bitcoin in his inauguration speech.
However, behind-the-scenes moves have aided a BTC recovery, supporting the view that actions speak louder than words. While Donald Trump failed to sign an executive order supporting crypto on his first day in the presidency, the Donald Trump back DeFi platform World Liberty Financial (WLFL) added $47 million of wrapped Bitcoin and Ethereum each to celebrate Trump’s inauguration. In addition, WLFL announced strategic purchases of AAVE, TRX, LINK, and ENA for its portfolio.
SEC to prepare a new regulatory framework
Following Gary Gensler’s exit, the Securities and Exchange Commission(SEC) said it is preparing a new regulatory framework for crypto. This news boosts confidence that Trump will deliver on his pledges of a more crypto-friendly regulation, helping to spur gains.
Even the US President’s recently launched meme coin $TRUMP rallied, although it still trades well below its weekend highs.
The SEC said it has created a new task force to help draft a regulatory framework for crypto. This will help other government agencies draft crypto-related legislation, including the Commodity Futures Trading Commission.
In the coming days, Trump is also expected to sign executive orders that could reduce the regulatory scrutiny of crypto, aligning with his promises across the election campaign to make America the crypto capital of the world.
MicroStrategy buys more Bitcoin
Adding to the supportive mood, tech giant MicroStrategy purchased an additional 11,000 Bitcoin for approximately $1.1 billion, as disclosed by CEO Michael Saylor on social media. The average purchase price was $101,191 per token between January 13th to January 20th.
This marks the firm’s 11th straight week of Bitcoin purchases, reinforcing its bullish outlook on the digital currency. MicroStrategy now holds over 2% of all Bitcoin that will ever be mined, totaling $47.9 billion at current levels.
ETH/BTC falls to a 4-year low
While Bitcoin is hovering around record highs, Ethereum struggles to sustain upward momentum.
As a result, ETH/BTC has fallen to a four-year low, raising concerns about ETH’s prospects and whether it can reverse its fortunes.
One reason for Ethereum’s underperformance against Bitcoin could be the high preference of institutions and governments for BTC.
While Bitcoin has seen adoption rates rise and higher preference than other crypto assets, Ethereum has experienced an adoption rate decline, with new addresses dipping by 9.3%. Furthermore, transactions on the Ethereum network have continually declined. The fall in activity raises concerns of overvaluation.
With reduced market preference, ETH could be vulnerable to more losses, and its poor performance against Bitcoin could continue.
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