Bitcoin drops 6% amid policy uncertainty

Cryptocurrency markets have taken a significant downturn, with bitcoin plunging approximately 6% and losing nearly all gains made after Donald Trump's election victory. The leading cryptocurrency has now dropped about 20% from its post-inauguration peak, disappointing investors who had high expectations for the self-proclaimed "crypto president."

Despite appointing crypto-friendly figures to key positions and regulatory agencies adopting a more favorable stance toward the sector—including dropping investigations and abandoning a probe into Coinbase—Trump has yet to implement the bold crypto initiatives some supporters anticipated. While he has assembled a working group to explore the concept of a national crypto reserve and potential new regulations, he hasn't directed the U.S. government to purchase bitcoin, leaving many industry observers disappointed.

Market analysts suggest expectations for Trump's crypto agenda may have been unrealistically high. Additional factors potentially weighing on crypto prices include concerns that further U.S. interest rate cuts could be delayed if inflation resurfaces.

The downturn has hit alternative cryptocurrencies even harder than bitcoin. Ether has fallen more than 40% since December, while Trump's own "memecoin" has lost a staggering 80% of its value since launching just days before his inauguration.

The broader impact has been severe, with the global cryptocurrency market losing nearly $1 trillion in value during this price decline. Market sentiment has shifted dramatically from the optimism that characterized the post-election period to growing uncertainty, with investors increasingly concerned about the administration's policy implementation timeline and potential economic headwinds.