Crypto markets steady after Trump's first policy move

By Tom Westbrook and Elizabeth Howcroft

NEW YORK/SINGAPORE/PARIS (Reuters) -Crypto markets crept up on Friday, still holding below recent highs even after President Donald Trump ordered a new working group to draw up crypto regulations long hoped for by the industry and explore the creation of a U.S. cryptocurrency stockpile.

Bitcoin has been broadly steady since Trump took office on Monday, pushing the world's biggest cryptocurrency to a fresh record of $109,071. It was last trading around $106,000 on Friday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed.

Bitcoin had been one of the most spectacular "Trump trades," gaining 50% to break above $100,000 and hitting fresh highs since Trump's election victory in November.

Trump courted crypto campaign cash with promises to reverse the Biden administration's crackdown on the industry and be a "crypto president" and this week his administration began delivering on that pledge.

In an executive order on Thursday, he touted the digital asset industry as "crucial" to U.S. innovation, created a working group to draft new crypto rules and explore a crypto stockpile, while the Securities and Exchange Commission (SEC) spiked accounting guidance that the industry said had stymied crypto adoption.

Those measures, though light on detail, seemed to alleviate some disappointment after crypto reform failed to feature in Trump's flurry of day-one announcements on Monday.

At 1714 GMT, bitcoin was up 2.8% on the day at $106,048 and smaller cryptocurrency ether was up 4.1% at $3,383.

"What we're seeing is a little bit of profit taking in line with the uncertainty we're seeing from Trump now," said Nick Twidale, chief market analyst at ATFX Global in Sydney.

"He's not reneging on some of his promises, but they're probably not going to come through as hard and fast."

$TRUMP TOKEN

Trump-linked crypto ventures, including a meme coin known as $TRUMP and tokens issued by World Liberty Financial, have come off highs in recent days.

The $TRUMP token, launched last Friday, was trading at around $32.62, according to CoinMarketCap, having lost about half its value since its peak around $75 on Sunday. It had traded below $10 early on Sunday.

Adding to the chorus of critics who have said Trump's coin and a similar $MELANIA meme coin launched by First Lady Melania Trump raise ethical issues, top Democratic Senator Elizabeth Warren queried U.S. regulators on the coins on Thursday.

"$TRUMP and $MELANIA present grave risks to President Trump’s ability to impartially govern our nation—and to investors in these coins," she wrote in the letter.

The White House did not immediately respond to a Reuters request for comment. Trump has pledged to hand management of his assets to his children.

EXECUTIVE ORDER

Thursday's executive order also required banking services for crypto companies be protected and banned the development of U.S. central bank digital currencies, which could compete with bitcoin and other established tokens.

The working group has until July to deliver a report recommending regulatory changes and evaluating the potential to create a national digital asset stockpile.

Analysts say bitcoin's price gains might take a breather for a while until the implications of the policy directives become clearer.

"While President Trump’s eagerly anticipated executive order on crypto largely delivered on his campaign promises, the lack of an explicit bitcoin strategic reserve left the crypto market limping into the weekend," said Jehan Chu, founder at Kenetic Capital, a Hong Kong blockchain venture capital firm.

(Reporting by Tom Westbrook and Elizabeth Howcroft; Editing by Michael Perry, Tommy Reggiori Wilkes, Michelle Price; Editing by Sharon Singleton)