Crypto markets stabilized on Friday, remaining below recent peaks despite President Donald Trump's directive to establish a new working group aimed at proposing regulations for cryptocurrencies and investigating the potential for a U.S. cryptocurrency reserve.

Since Trump's inauguration on Monday, Bitcoin has maintained a relatively steady position, trading at approximately $105,000 on Friday as enthusiasm surrounding anticipated changes in cryptocurrency regulation began to wane.

Bitcoin emerged as one of the most notable "Trump trades" in the financial sector, surging 50% to surpass the $100,000 mark and reaching levels not seen since Trump's election victory in November, when he advocated for a bitcoin reserve and a favorable approach to cryptocurrencies.

An executive order issued on Thursday, which established a digital assets working group, appeared to mitigate some of the disappointment stemming from the absence of crypto reform in a series of policy announcements made on his first day in office, although it lacked specific details.

As of 1418 GMT, Bitcoin had risen 1.9% for the day, reaching $105,128, while the smaller cryptocurrency ether increased by 4.4% to $3,389.

"What we're seeing is a little bit of profit taking in line with the uncertainty we're seeing from Trump now," said Nick Twidale, chief market analyst at ATFX Global in Sydney.

"He's not reneging on some of his promises, but they're probably not going to come through as hard and fast."

Crypto initiatives associated with Trump, such as the meme coin $TRUMP and tokens from World Liberty Financial, have seen declines from their recent highs, raising concerns among ethics experts and market observers regarding potential conflicts of interest.

The $TRUMP token, launched by Trump last Friday, was trading at approximately $33.76, according to CoinMarketCap, having lost nearly half its value since peaking at around $75 on Sunday. It had dipped below $10 earlier that same day.

Two Democratic lawmakers, Senator Elizabeth Warren and Representative Jake Auchincloss, have requested that U.S. regulators provide clarity regarding the cryptocurrencies $TRUMP and $MELANIA, which were introduced by former President Trump and his wife. In their letter, they alleged that these tokens enable the couple to "earn extraordinary profits off his Presidency."

The lawmakers expressed concerns that "$TRUMP and $MELANIA pose significant risks to President Trump’s ability to govern impartially and to investors in these coins, who could potentially fall victim to a rug pull scheme orchestrated by the Trump family." This letter was sent to the U.S. Office of Government Ethics, the U.S. Treasury Department, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

The White House has not yet responded to a request for comment from Reuters sent via email.

Ethics experts have raised new concerns about conflicts of interest arising from these meme coins. Trump has committed to transferring the management of his assets to his children.

EXECUTIVE ORDER

The executive order issued on Thursday, titled "Strengthening American leadership in digital financial technology," mandated the protection of banking services for cryptocurrency companies while prohibiting the development of a U.S. central bank digital currency, though it lacked specific details.

A high-level working group has been tasked with delivering a report by July that will recommend regulatory changes and assess the feasibility of establishing a national digital asset stockpile.

This executive order from Trump rescinded a 2022 directive from President Joe Biden that had encouraged regulators like the SEC and CFTC to provide guidance and address risks within the cryptocurrency ecosystem.

On Thursday, the SEC also withdrew certain accounting guidance that had made it costly for companies to manage crypto assets on behalf of third parties, a change that the industry had been advocating for.

Crypto executives celebrated the new administration at a sold-out black-tie event last week. Analysts suggest that the recent price increases in bitcoin may experience a temporary pause.

Geoff Kendrick, the global head of digital assets research at Standard Chartered, stated that to enhance prices, it is essential to implement clear policy actions favoring digital assets. This could include measures such as an executive order regarding a bitcoin reserve, deregulation, or a firm declaration against the imposition of tariffs.