With 2025 coming to an end, the former president's favorable approach to cryptocurrency has not proven to suffice to support the industry’s gains, previously the source of broad optimism and excitement. The final quarter of 2025 witnessed roughly $1 trillion in market capitalization erased from the crypto market, even after bitcoin hitting a record peak of $126,000 in early October.
The October price peak was short-lived. Bitcoin’s price tumbled shortly afterward after a declaration of 100% tariffs against Chinese goods sent shockwaves across the market in mid-October. Digital asset markets experienced a staggering $19 billion wiped out in 24 hours – the largest forced selling event on record. The second-largest crypto, Ethereum, saw a 40 percent decline in value over the next month.
The industry got the supportive administration it had anticipated throughout the election. Within days after inauguration, a presidential directive was issued rolling back limitations against cryptocurrency and introduced new favorable regulations alongside a federal task force focused on crypto.
“Cryptocurrency plays a crucial role in innovation and economic growth in the United States, as well as our Nation’s international leadership,” the order read.
Later in March, a new strategic cryptocurrency reserve sparked a significant rally in the market, with prices of select named coins jumping by over 60%. The leading cryptocurrency went up 10% immediately after the reserve news.
Cryptocurrency reacts strongly to market sentiment and confidence worldwide, said an industry expert. It’s what is called a speculative investment, an investment that does better when investors are feeling confident regarding economic conditions and are ready to assume greater risk.
“The current government may be pro-crypto, however, trade wars and rising interest rates outweigh favorable rhetoric,” they continued. “And it’s also just a reminder, particularly to people in crypto, that macro forces are far more significant than political support.”
Later in the year, bitcoin underwent its biggest drop in value in several years, pushing its price to less than $81,000. While bitcoin regained some of that value afterward, December began with a fresh downturn, a six percent fall following a leading bitcoin holder slashing its profit outlook due to falling crypto prices. Bitcoin’s price currently fluctuates around $90,000.
Some experts fear the industry is entering a so-called crypto winter, a period of stagnation or losses. The previous such downturn lasted from late 2021 through 2023. That period witnessed Bitcoin fall approximately 70% in price.
“This latest collapse isn’t a change in belief, but rather a confluence of several key issues: the lingering effects of a massive deleveraging event; a risk-off rotation spurred by US-China tariff tensions; and, crucially, the possible unwinding of the corporate treasury trade,” explained a noted economist.
Another potential factor impacting digital assets is the decline in share prices of AI stocks. “A key reason why bitcoin is tied to the AI cycle is that a lot of mining operations have diversified their power into new datacenters,” it was explained. “Pessimism in tech tends to sneak into the crypto space.”
Amid the worries about a bear market, prominent leaders within the industry voiced confidence about the long-term value of the currency. One executive remarked “it is impossible” the price of bitcoin would hit zero and in fact 2025 will be remembered as the time “where digital assets transitioned from a fringe market to a mainstream institution”. Another pointed out increased investment from institutional investors.
Some believe this downturn is not inconsistent with historical four-year bitcoin cycles , adding that a deeply prolonged crypto winter may not be imminent.
“From the perspective of a traditional bitcoin cycle, we are actually technically in a bear market,” said one analyst. “However, it's clear, even with these major headwinds impacting the market, it has held to maintain a level above $80,000.”
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