Bloomberg: Bitcoin recorded its biggest drop since the US election last weekend, and most of the positive news has been digested by the market

Bitcoin suffered its biggest two-day drop since the U.S. election last weekend, falling nearly 3% on Saturday and Sunday before recovering some of its losses to trade at $90,394.2 at press time. Uncertainties affecting the market include Trump's timetable for fulfilling his promise to support cryptocurrencies and whether all measures are feasible, such as establishing a U.S. Bitcoin reserve. In the U.S. stock market, the excitement generated by Trump's business-friendly stance is being dampened by inflation risks from trade tariffs and deficit spending to fund tax cuts. Investors are lowering expectations for Fed rate cuts because the U.S. economy is solid, which could be a hurdle for the cryptocurrency market as liquidity conditions affect speculative demand for digital currencies. Tony Sycamore, market analyst at IG Australia Pty, wrote in a report that Bitcoin has become "overheated" after a record rally since Election Day on November 5, and "its price rally has priced in a lot of good news." JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou wrote in a report that cryptocurrency legislation could soon be approved under the Trump administration, which would prompt a shift in regulation from enforcement to a more collaborative approach. The team said banks could enjoy greater participation in the digital asset space, and the market is more hopeful that cryptocurrency ETFs will be approved to invest in cryptocurrencies other than Bitcoin and Ethereum. The strategists said regulatory clarity would boost venture capital, mergers and acquisitions, and initial public offerings. But they added that building a U.S. Bitcoin reserve is a "low-probability event." (Bloomberg)