Bitcoin dropped below $88,000 on Tuesday, surrendering part of rally. The token previously briefly surpassed $90,000.

Crypto stocks turned negative in premarket trading on Tuesday. Canaan fell 5%; CleanSpark and Marathon Digital fell 4%; Riot Platforms fell 3%; Coinbase and Bitfarms fell 2%; MicroStrategy fell 1%.

"Obviously (it's) a clear Trump trade as he is so supportive of the industry, and this can only mean more demand both for crypto stocks as well as the currencies themselves," said Nick Twidale, chief market analyst at ATFX Global in Sydney.

"The fact that bitcoin was trading near all-time highs when the election result came through meant that it had clean sky above."

Trump embraced digital assets during his campaign, promising to make the United States the "crypto capital of the planet" and to accumulate a national stockpile of bitcoin.

It is not clear how or when that could happen but the possibility drove a speculative surge in crypto mining and trading stocks.

"I think it increases the chances that other nation states buy bitcoin in a bid to front run the U.S.," said Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital.

"Additionally I think it would be a crazy catalyst for the U.S. listed Bitcoin miners ... given possibilities of such entities getting nationalised."

Crypto investors see an end to increased scrutiny under U.S. Securities and Exchange Commission Chair Gary Gensler whom Trump has said he will replace. Trump also unveiled a new crypto business, World Liberty Financial, in September.

"What we're seeing isn't just a price milestone; it's a signal that the market is warming to the idea of bitcoin as a more stable, even politically favoured, asset," said Justin D'Anethan, head of Asia-Pacific business development at digital assets market maker Keyrock.