For the crypto sector, things weren’t meant to proceed this way.
After winning reelection, President Trump promised to turn the United States into “the crypto capital of the world.” The Republican-led Congress has passed laws that many critics feel is overly lenient on the industry, and since he returned to office, he has nominated regulators who are known to be sympathetic with the industry.
Initially, cryptocurrency took off. When Trump was re-elected in November 2024, the price of bitcoin almost doubled, and in October 2025, it hit an all-time high of almost $126,000 per coin.
That is, until it all fell apart. After peaking, Bitcoin has subsequently fallen, and this week it hit about $60,000, which is less than it was when Trump was reelected.
What happened, then, and what’s next? These are three things to be aware of.
Big bets and big losses
There was enthusiasm following Trump’s reelection and investors’ hope for a revolutionary period in cryptocurrency, but there was also a lot of uncertainty. Many took out large loans to acquire even more cryptocurrency in addition to trading it.
Profits were boosted by all that borrowing during the bitcoin and cryptocurrency boom. However, as soon as bitcoin’s value began to decline, the opposite occurred: the losses were exacerbated.
Trump’s October 10 threat to impose an additional 100% tariff on Chinese goods, on top of the 30% already in place, was the catalyst for that decrease. This alarmed traders, who withdrew a wide range of investments, including currencies and equities.
After a while, stocks rebounded, and then some. On Friday, for instance, the Dow Jones Industrial Average reached its most recent record high.
However, the losses resulting from all of that borrowing and speculation rocked the cryptocurrency market, reminding investors of its volatility. Additionally, it caused a contagion effect in which significant drops alarmed an increasing number of people into selling.
The losses have been long overdue for skeptics of cryptocurrency like Ben Schiffrin, senior policy director at Better Markets, an advocacy group for consumer finance.
“Bitcoin is anything but safe,” he asserts. “It’s the most speculative asset, and I think people are realizing that that’s the case.”
The infamously unstable history of cryptocurrency
The recent crash serves as a reminder of the industry’s infamously erratic past. For instance, the crypto industry came into 2022 full of optimism after the pandemic helped spur a spike in trading from people stuck at home, which fueled a frenzy that increased all types of speculative investments, from cryptocurrencies to digital tokens known as NFTs.
But then a string of events, including the Federal Reserve raising interest rates, brought about a time of extreme volatility that ultimately resulted in the demise of the cryptocurrency exchange FTX, which in turn caused a severe slump, or “winter,” as it is known in the industry. Bitcoin’s value dropped from over $50,000 to less than $20,000 in 2022. Trump’s reelection in late 2024 was the catalyst for Bitcoin’s real comeback.
Similarly, in the months preceding up to 2018, there was a frenzy of investment in initial coin offerings (ICOs), in which cryptocurrencies were offered in the same way that companies sell shares in IPOs. After peaking in January 2018, the cryptocurrency market plummeted.
The drive to mainstream cryptocurrency is still ongoing
Although the duration of the present downturn is uncertain, investors in cryptocurrencies have hope because the industry is being supported by certain noteworthy tailwinds.
Possibly the most significant is the radical shift in the crypto regulatory landscape.
When Trump appointed Paul Atkins, a consultant with experience in the cryptocurrency market, as his chair of the Securities and Exchange Commission last year, he essentially put a supporter of cryptocurrency in control of the main federal organization that oversees the financial sector.
Congress, meanwhile, established the nation’s first significant crypto law, setting regulations for stablecoins, an emerging subset of cryptocurrency that enable nearly instantaneous transactions between parties worldwide.
Since the sector spent hundreds of millions of dollars in 2024 to elect lawmakers who supported cryptocurrency, the occasion marked a significant legislative win.
The crypto business is still working to have another significant measure passed, which would decide which regulator would be in charge of the industry, among other things. The bill has stuck in the Senate.
Despite the current downturn in Bitcoin and other cryptocurrencies, investors are still optimistic that the Trump administration will continue to provide the framework for a crypto revolution.
