Gold prices cool after rallying on Powell rate cut talk
Investing.com-- Bitcoin pulled back on Monday, tracking a broader decline in equity markets as tariff threats from U.S. President Donald Trump rattled risk appetite, while technology stocks were unsettled by a disruptive new artificial intelligence offering from China.
Bitcoin remained under pressure from persistent uncertainty over just what Trump’s policies will entail for crypto, after the President announced new, albeit vague plans to draft a regulatory framework for the industry.
Risk appetite was also pressured by anticipation of a Federal Reserve meeting this week, where the central bank is widely expected to hold interest rates and strike a hawkish chord.
Broader risk-driven markets sank in Asian trade, with tech stocks under pressure from DeepSeek, which recently released an AI program that claimed to match rivals such as ChatGPT in performance for a fraction of the cost. Losses in equities appeared to have spilled over into crypto.
However, Tomas Fanta, Principal at crypto venture fund Heartcore told Investing.com that DeepSeek represents a "net positive for the crypto ecosystem," adding that the current market sell-off marks "a temporary divergence from fundamentals driven by high crypto-equity market correlation."
Bitcoin fell 5% to $99,424.1 by 1:03 p.m. ET (18:03 GMT). The cryptocurrency initially fell below the $100,000 mark but has recovered some ground later.
A memecoin launched by the President earlier in January, $TRUMP, also slid further on Monday after wiping out about 60% of its value since a post-launch peak.
Trump uncertainty dents crypto
Risk appetite was sapped by Trump threatening to impose 25% trade tariffs on Colombia over refusal to comply with his stance on deporting migrants. But Colombia’s government accepted Trump’s terms shortly after his tariff threat, with the White House stating that the proposed tariffs were now on hold.
Still, Trump’s move drummed up fears that he will make good on his threats to impose tariffs on other major economies, including Mexico, Canada, and China.
But a bigger point of contention over Trump, especially for crypto markets, was that Trump made no mention of Bitcoin in an executive order calling for better crypto regulations and a national digital asset reserve.
This sparked increased doubts over whether Trump will actually be able to deliver on promises of a Bitcoin reserve. Establishment of the reserve through an executive order is likely to limit its scope, while any requirement of Congressional approval for the reserve is expected to face opposition from fiscally conscious lawmakers.
Crypto funds attracted $1.9bn in inflows after Trump's EOs, CoinShares (ST:CS) says
Global crypto funds managed by firms such as BlackRock (NYSE:BLK), Fidelity, Grayscale, Bitwise, ProShares, and 21Shares recorded $1.9 billion in net inflows last week, according to CoinShares.
The inflows were driven by former President Donald Trump’s recent executive orders (EOs), including the establishment of a "Presidential Working Group on Digital Asset Markets" to develop federal regulations for digital assets, including stablecoins, and to evaluate creating a "strategic national digital assets stockpile."
Trump also issued a full pardon for Ross Ulbricht, a figure tied to Bitcoin’s early history.
These actions boosted investor confidence, with no digital asset investment products experiencing net outflows, CoinShares said in a report.
MicroStrategy announces stock offering to buy more Bitcoin
MicroStrategy announced plans for a 2.5 million preferred share offering as it explores new avenues to acquire more Bitcoin.
The Series A Perpetual Preferred Stock, named STRK, will carry an $8% cumulative dividend and a $100 liquidation preference, according to Executive Chairman Michael Saylor. Each STRK share can initially be converted into one-tenth of a Class A common stock share at a $1,000 conversion price.
The announcement follows MicroStrategy's continued bitcoin accumulation, marking its 12th consecutive week of purchases.
For the week ending January 26, the company acquired 10,107 BTC, bringing its total holdings to 471,107 BTC, Saylor shared on X. The purchase, made at an average price of $105,596 per bitcoin, raised the company's overall average acquisition price to $64,511 per BTC.
Crypto price today: altcoins track Bitcoin losses, $TRUMP rout worsens
Broader crypto prices retreated on Monday, falling in tandem with Bitcoin as risk appetite remained subdued.
Memecoin $TRUMP fell 7% to $26.63. The token has now wiped out about 60% of its value since a post-launch peak of over $60 and has steadily fallen in the past week amid volatile trade.
Volatility in $TRUMP also spilled over into broader crypto markets, souring sentiment towards the sector. The token- which netted Trump billions in paper gains- raised questions over the ethics of Trump using his influence to manipulate crypto markets.
World no.2 crypto Ether fell over 7% to $3,080.35, while XRP sank 6.2% to $2.97.
Solana, Cardano, and Polygon slid between 8% and 11%, while among meme tokens, Dogecoin lost over 8%.
Ambar Warrick contributed to this report.