With 2025 coming to an end, the former president's favorable approach towards cryptocurrency has not proven to suffice to support the industry’s gains, once the driver behind market-wide optimism and excitement. The last few months of the year witnessed an estimated $1 trillion in value wiped from the crypto market, even after bitcoin hitting a record peak above $125,000 on October 6th.
That record high proved temporary. Bitcoin’s price plummeted just days later following a declaration of sweeping tariffs against Chinese goods sent shockwaves across the market on October 12th. The crypto market saw a staggering $19 billion wiped out in 24 hours – the largest forced selling event on record. Ethereum, endured a 40 percent decline in value over the next month.
Crypto advocates was delivered the supportive administration they were promised throughout the election. Shortly of taking office, a presidential directive was signed that repealed limitations against cryptocurrency while enacting business-friendly rules alongside a presidential working group on digital assets.
“The digital asset industry plays a crucial role in innovation and economic growth in the United States, and for America's global standing,” the order read.
Later in March, a new strategic cryptocurrency reserve fueled a significant market surge, with values for several named coins soaring by over 60%. The leading cryptocurrency rose 10% immediately following the was announced.
Cryptocurrency is sensitive to market sentiment and investor confidence worldwide, said a leading analyst. It is classified as a risk-on asset, an asset that does better during periods of optimism regarding economic conditions and are willing to assume greater risk.
“The current government might support crypto, but tariffs and rising interest rates trump positive vibes,” the analyst added. “This also serves as a stark reminder, particularly to those in the sector, that macro forces are far more significant than political stances.”
Later in the year, bitcoin underwent its biggest drop in price since 2021, bringing the coin’s value to less than $81,000. While bitcoin regained some of that value subsequently, the start of the final month with a fresh downturn, a 6% drop following a leading corporate holder cutting its earnings forecast due to falling crypto prices. Bitcoin’s price currently fluctuates around $90,000.
Some experts fear the industry may be heading into what's termed crypto winter, a period of low activity and declining prices. The last such downturn lasted from the end of 2021 through 2023. Those years saw bitcoin slump approximately 70% in price.
“This latest collapse isn’t a change in belief, but rather a confluence of three structural factors: the aftershocks of a massive leverage washout; a risk-off rotation spurred by geopolitical trade disputes; and, crucially, the potential unraveling of the corporate treasury trade,” explained a noted economist.
An additional element impacting the crypto market is the downturn in values of artificial intelligence companies. “A key reason why bitcoin is tied to the AI cycle is because many bitcoin miners have diversified their energy towards new datacenters,” an expert said. “That negative sentiment often spills over into crypto.”
Amid the worries over a crypto winter, notable players in the crypto space have expressed optimism in the future worth of Bitcoin. A top CEO said “it is impossible” the price of bitcoin would hit zero and in fact 2025 will be remembered as the year “where digital assets transitioned from gray market to a mainstream institution”. Another noted increased investment from sovereign wealth funds.
Some believe the current decline is not inconsistent with historical market cycles and that a deeply prolonged crypto winter may not be imminent.
“If I was looking at it from traditional bitcoin cycle, we are actually technically in a bear market,” came the assessment. “But as you can see, despite these major headwinds that are affecting markets, it has held to set a price above $80,000.”
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