As 2025 draws to a close, the cryptocurrency industry is confronting a harsh reality check. Despite entering the year buoyed by the election of a vocally pro-Bitcoin US President, Donald Trump, the market has seen staggering losses, with roughly $1tn wiped from its total value in the final months.
From Presidential Promise to Market Plunge
Donald Trump’s administration moved swiftly to cement its crypto-friendly credentials. Within days of his second inauguration, an executive order repealed previous restrictions and established a presidential working group on digital assets, declaring the industry crucial for “innovation and economic development.”
This policy support initially fuelled optimism. In March, the announcement of a strategic cryptocurrency reserve sparked a 62% rally for three of the five named coins. Bitcoin itself jumped 10% to $94,164 on the news. The peak came on 6 October, when Bitcoin hit a historic high of $126,000.
However, the euphoria was short-lived. Days later, on 12 October, President Trump’s shock announcement of 100% tariffs on China triggered a market earthquake. $19bn was liquidated in 24 hours – a record event – sending prices into a tailspin. Ethereum plunged 40% over the following month.
Macro Forces Overpower Political Support
Analysts point to this volatility as proof that macroeconomic forces ultimately outweigh political sentiment. “The Trump administration may be pro-crypto, but tariffs and tight monetary policy outweigh positive vibes,” said Rachael Lucas, Head of Marketing at BTC Markets, Australia’s largest exchange.
She emphasised that cryptocurrency is a classic “risk-on” asset, highly sensitive to broader investor confidence. “It’s a reminder, especially for people in crypto, that macro forces really matter more than political stances,” Lucas added.
The downturn has been broad and severe. Bitcoin suffered its biggest single drop since 2021 in November, falling below $81,000. December began with another 6% slump after major holder Strategy cut its earnings forecast. Even the Trump family felt the sting; Eric Trump’s American Bitcoin Corp lost 40% of its value, roughly $1bn, in early December, though he publicly vowed to hold his shares.
Is Another Crypto Winter Here?
The scale of the collapse has reignited fears of a prolonged “crypto winter,” similar to the 70% decline that lasted from late 2021 through 2023. Christian Catalini, founder of the MIT Cryptoeconomics Lab, argues the recent crash stems from structural issues: the October leverage washout, US-China trade tensions, and a potential unravelling of corporate treasury trades.
Lucas also noted a link to sliding AI stock prices, like Nvidia’s, as Bitcoin miners have diversified into data centres. “That negative sentiment tends to sneak into crypto,” she explained.
Despite the gloom, some industry leaders remain bullish on long-term prospects. At a recent conference, Coinbase co-founder Brian Armstrong stated there was “no chance” Bitcoin would go to zero, calling 2025 the year crypto moved “from gray market to a well-lit establishment.” BlackRock CEO Larry Fink noted “legitimate long owners,” including sovereign wealth funds, were investing.
Rachael Lucas suggests the current correction fits historical Bitcoin cycles and may not signal a deep winter. “Even with all of these macros affecting the market, Bitcoin has still managed to set a price above $80,000,” she observed.
Nevertheless, the events of late 2025 demonstrate that even a president who places cryptocurrency “front and center” in American policy cannot inoculate the market from global economic shocks and its own inherent volatility.
