LIVE MARKETS-Crypto markets set to pop inauguration champagne

ReutersJan 17, 2025 5:17 PM

Main U.S. indexes all up >1%: Nasdaq out front, up ~1.6%

Cons disc leads S&P sector gainers; healthcare ~flat

Euro STOXX 600 index up ~0.7%

Dollar gains; bitcoin rallies >4%; gold ~flat; crude declines

U.S. 10-Year Treasury yield edges up to ~4.62%

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CRYPTO MARKETS SET TO POP INAUGURATION CHAMPAGNE

Cryptocurrency investors look set to welcome Donald Trump to the White House next week, with prices of bitcoin leaping and crypto-focused stocks rallying ahead of Monday's inauguration.

Bitcoin BTC= is up 4.6%, back above $104,000 for the first time in nearly one month and on track for its best week since November.

Ethereum ETH= is up 3.3%, and the total market value of all cryptocurrencies has jumped 3% to $3.81 trillion, as per CoinGecko.

Crypto markets have been at the mercy of macro news over the past few weeks, but this week's softer U.S. inflation print and the prospect of multiple Fed rate cuts has boosted risk assets across the board.

"The macroeconomic backdrop remains supportive, with unemployment trending downward, inflation showing signs of easing, and the market riding a wave of enthusiasm tied to Trump’s inauguration," says Valentin Fournier, analyst at digital asset research firm BRN.

Exchange traded funds tracking bitcoin and ether, saw inflows of $626 million and $166 million on Thursday, respectively, as per digital asset research firm BRN, reversing a recent trend of outflows.

Trump's election provided a shot in the arm for the crypto market, with investors welcoming moves including proposals for a strategic bitcoin reserve, and nomination of crypto-friendly cabinet and regulatory agency picks.

Bitcoin has soared over 51% since the Nov. 5 election.

Still, it remains to be seen how Trump will approach crypto in his first 100 days in office.

"Delays in (Trump) implementing proposed measures could trigger a “sell the news” reaction, potentially disrupting Bitcoin’s current positive momentum," Fournier cautioned.

Digital asset investment products had seen outflows of $940 million during the latter half of last week, after the release of the Fed's Dec meeting minutes and stronger-than-expected labor market data, as per CoinShares data.

(Lisa Mattackal)

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