(Bloomberg) — Bitcoin retreated after rallying toward $100,000 just below historic levels amid warnings that investor optimism stemming from newly elected President Donald Trump’s support for crypto was becoming overblown.
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The digital asset fell to $95,776 on Sunday after coming within $300 of the six-figure mark on Friday. It struggled for traction early Monday in Asia near $97,000, setting a gloomy tone for the broader crypto market.
“Investors are worried it will have to take a breather now that it has essentially tested the $100,000 level,” said Matt Maley, chief market strategist at Miller Tabak + Co. “I notice that the bullishness around Bitcoin is becoming extreme.”
Trump’s incoming US administration is seen as a crypto wind on Wall Street and beyond. The total value of the digital asset market has increased by about $1 trillion since the Republicans won on November 5.
Trump has promised friendlier regulations and promised to set up a national Bitcoin stockpile, although the timeline for implementation and the feasibility of the Bitcoin stockpile remain open questions.
“I see an increasing skew on the sell side as we approach the $100,000 mark,” said David Lawant, head of research at crypto prime broker FalconX. “This suggests we may experience near-term consolidation around this level before a sustained break above.”
Traders had seized on the U.S. crypto outlook to push Bitcoin to the brink of $100,000, a symbolic level that for crypto proponents rebuffs skeptics who see little intrinsic value in digital assets.
The latest developments include a Bloomberg News report that Cantor Fitzgerald LP is in talks with Tether Holdings Ltd. about receiving support from the stablecoin issuer for Cantor’s planned multibillion-dollar program to lend dollars to customers putting up Bitcoin as collateral.
Cantor’s CEO Howard Lutnick is co-chair of Trump’s transition team and the president-elect to lead the Commerce Department.
The president-elect’s transition team has also had discussions about whether to create the first-ever White House post dedicated to digital asset policy.
Since Trump’s victory, money has flowed into US exchange-traded funds that invest directly in Bitcoin, and the products have now amassed $107 billion in assets since launching in January. The group of twelve Bitcoin ETFs, from issuers such as BlackRock Inc. and Fidelity Investments, are among the most successful fund class launches in history.
