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Bitcoin and other cryptocurrencies sank on Tuesday, as bullish investor sentiment surrounding cryptocurrencies cooled after President Donald Trump’s inauguration.
TRUMP, a token launched last week that represents the new U.S. leader, plunged as much as 22% in 24 hours, according to CoinGecko data. Meanwhile, a meme token released Sunday by first lady Melania Trump, crashed 58% in a day.
Bitcoin sank about 5% to $102,589, while ether and XRP were down 3% and 5%, respectively.
Crypto investors have hailed Trump’s arrival to the White House as a positive moment for the industry. The president has promised to introduce policies supportive of cryptocurrencies, including an accommodating regulatory framework and a federal bitcoin hoard.
While Trump is viewed as set to benefit crypto, his Monday inauguration lacked any concrete policy announcements regarding the sector. That appeared to be the primary factor taking the wind out of the crypto market’s sails on Tuesday.
Kenneth Lamont, a principal at Morningstar, warned investors not to jump into crypto trading without being properly informed about the risks involved.
“If Donald Trump delivers on his election promises, we could see cryptocurrency markets continue to surge. However, investors would do well to resist the siren call of fear of missing out, and sit on their hands,” Lamont said in emailed comments Tuesday.
Cryptocurrencies are known to be volatile. Bitcoin, the world’s largest digital coin, has previously risen or fallen by thousands of dollars in a single day. Alternative coins, or “altcoins,” like ether and XRP, have proven even more more prone to fluctuations.
“Fear of missing out is not an investment strategy. For many investors, the lure of easy wealth is strong,” Lamont said, adding that retail investors “tend to be poor at market timing, buying and selling at the worst moments.”