(Dec 10): A bout of selling buffeted crypto, as the optimism sparked by President-elect Donald Trump’s embrace of the sector began to cool.

Bitcoin fell below US$95,000 (RM420,650) at one point on Tuesday, while an index of smaller digital assets slid as much as 15%, one of its biggest intraday drops of 2024.

Speculators plowed into crypto after the US election on Nov 5, spurred by Trump’s pledge to create a supportive regulatory backdrop and his controversial backing for a national bitcoin reserve. At the same time, the hair-trigger volatility of digital assets left investors prone to exiting bets quickly.

Bitcoin hit a record US$103,800 on Dec 5, but subsequently struggled to stay above the six-figure level. The overall crypto market has shed about US$150 billion in the past 24 hours, based on figures from tracker CoinGecko.

Recent trading points to “deleveraging across the crypto ecosystem,” said Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors LLC. One trigger may be caution ahead of US inflation data on Wednesday, that may colour expectations for the US Federal Reserve interest-rate cuts, according to Farrell.

Trump has picked a digital-asset supporter to be the next head of the US securities regulator, and named the first-ever White House czar for artificial intelligence and crypto. He used to be a crypto skeptic but pivoted, as the industry spent big on promoting its interests during election campaigning.

For fans of digital assets, a boom lies ahead, as Trump rips up a crackdown imposed by the Biden administration. Critics say wider mainstream crypto acceptance brings a panoply of risks. 

About US$10 billion has poured into US spot-bitcoin exchange-traded funds since Trump became president-elect. Meanwhile, bitcoin accumulator MicroStrategy Inc bought another US$2.1 billion of the token.

Traders may view MicroStrategy’s announcements of historical purchases as “implicitly pulling a pretty significant spot bid from the market,” Farrell said.

Bitcoin changed hands at US$97,990 as of 9:47am on Tuesday in Singapore. Smaller tokens such as ether and meme-crowd favourite dogecoin were mixed.

Fairlead Strategies LLC technical analyst Katie Stockton, in a note recommended a “neutral short-term bias” after bitcoin’s failure to remain above US$100,000.

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