Blog

As 2025 comes to a close, Donald Trump’s favorable approach to cryptocurrency has not proven to be enough to sustain the industry’s gains, once the source of market-wide optimism and enthusiasm. The last few months of the year have seen $1tn in value wiped from the digital asset market, despite bitcoin hitting an all-time-high price of $126,000 on 6 October.

The October price peak was short-lived. Bitcoin’s price tumbled just days later after Trump’s announcement of 100% tariffs on China sent shockwaves across the market on 12 October. The crypto market saw $19bn liquidated in 24 hours – the largest liquidation event on record. Ethereum, the second-largest cryptocurrency, saw a 40% drop in price over the next month. Eric Trump’s own crypto company endured a similar drop in its value in December.

In Donald Trump, the crypto industry was delivered the pro-bitcoin president they were promised during his campaign. Within days of taking office for the second time, he issued an executive order that repealed restrictions on cryptocurrency and introduced new favorable regulations as well as a presidential working group on digital assets.

“The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our Nation’s international leadership,” the order read. He placed cryptocurrency front and center in American policy.

Again in March, Trump announced a new strategic cryptocurrency reserve that fueled a 62% rally in the market prices of three out of five of the coins named to the reserve. Bitcoin, the world’s most valuable cryptocurrency, went up 10% to $94,164 in the hours after the reserve was announced.

A line chart visualizing the fluctuating price of bitcoin over the past year

Cryptocurrency is sensitive to both narratives and confidence in global markets, said Rachael Lucas, the head of marketing and communications at BTC Markets, Australia’s largest cryptocurrency exchange. It’s what is called a risk-on asset, an investment that does better when investors are feeling confident about the economy and are willing to take on more risk, Lucas said.

“The Trump administration may be pro-crypto, but tariffs and tight monetary policy outweigh positive vibes,” said Lucas. “And it’s also just a reminder, especially for people in crypto, that macro forces really matter more than political stances.”

In November, bitcoin suffered its biggest drop in price since 2021, bringing the coin’s value to less than $81,000. While bitcoin regained some of that value in the weeks after, the digital token started December with another slump, dropping 6% after Strategy, the biggest holder of bitcoin, cut its earnings forecast because of the slide in crypto prices. Bitcoin’s price now hovers near $90,000, up from years past but significantly lower than its peak.

In the first few days of December 2025, Eric Trump’s crypto firm, American Bitcoin Corp, saw 40% of its value – roughly $1bn – wiped out.

The Trump family scion put on a bullish face and declared he would ride out the decline. “I’m holding all my @ABTC shares – I’m 100% committed to leading the industry,” Eric Trump said on X at the time.

Some experts fear the industry is entering a so-called crypto winter, a prolonged period of stagnation or losses. The last time, crypto winter lasted from the end of 2021 through 2023, when the FTX mogul Sam Bankman-Fried was tried and convicted. Those years saw bitcoin slump 70% in price.

Despite the optimism fueled by Trump’s win, the current market downturn shows the crypto-friendly administration wasn’t enough to usher in a return to the “retail mania” of 2021, when there was a huge upswing in individual stock trading, said Christian Catalini, the founder of the MIT Cryptoeconomics Lab.

“The recent crash isn’t a change in sentiment, but a collision of three structural factors: the aftershocks of a $19bn leverage washout in October; a risk-off rotation driven by US-China tariff tensions; and, crucially, the potential unraveling of the corporate treasury trade,” Catalini said.

Another potential factor that may have shaken the crypto market is the downturn in share prices of AI stocks like Nvidia, said Lucas.

“One of the reasons why bitcoin is tied to the AI cycle is because a lot of the bitcoin miners actually started leveraging their energy towards new datacenters,” she said. “Not only is crypto a technical asset, we have the miners actually tied into AI devices going up. That negative sentiment tends to sneak into crypto.”

Despite concerns over a crypto winter, notable players in the crypto space Larry Fink, the CEO of investment management firm BlackRock, and Brian Armstrong, the co-founder of Coinbase, the largest crypto exchange in the US, expressed optimism about the long-term value of the currency at a recent New York Times conference. Armstrong said “there was no chance” the price of bitcoin would go to zero and in fact 2025 would be seen as the year “when crypto went from gray market to a well-lit establishment”. Fink, for his part, said his firm had observed “legitimate long owners investing in the currency”, including sovereign wealth funds.

Lucas said that this downturn in crypto prices was not inconsistent with past four-year bitcoin cycles and that she was not worried about entering a much more sustained crypto winter.

“If I was looking at it from a traditional bitcoin cycle, we are actually technically in a bear market,” said Lucas. “But as you can see, even with all of these macros that are affecting the market, bitcoin has still managed to set a price above $80,000.”