As 2025 draws to a close, Donald Trump’s favorable approach to cryptocurrencies has not proven enough to sustain the sector’s gains, once a source of market-wide optimism and enthusiasm. In the last months of the year, $1 trillion was wiped from the digital asset market, although bitcoin hit a record price of $126,000 on October 6.
The October price peak was short-lived. The price of Bitcoin fell a few days later after Trump’s announcement of 100% tariffs on China sent shockwaves through the market on October 12. The crypto market saw $19 billion liquidated in 24 hours – the largest liquidation event on record. Ethereum, the second largest cryptocurrency, saw its price drop by 40% over the following month. Eric Trump’s own crypto company suffered a similar drop in value in December.
With Donald Trump, the crypto industry received the pro-bitcoin president it was promised during his campaign. Days after taking office for the second time, he issued an executive order repealing restrictions on cryptocurrencies and introducing favorable new regulations as well as a presidential task force on digital assets.
“The digital assets industry plays a crucial role in innovation and economic development in the United States, as well as our country’s international leadership,” the order states. He brought cryptocurrency to the forefront of American politics.
Also in March, Trump announced a new strategic cryptocurrency reserve that fueled a 62% surge in market prices of three of the five coins named in the reserve. Bitcoin, the world’s most valuable cryptocurrency, rose 10% to $94,164 in the hours following the reserve’s announcement.
Cryptocurrency is sensitive to both narratives and trust in global markets, said Rachael Lucas, head of marketing and communications at BTC Markets, Australia’s largest cryptocurrency exchange. It’s called a risk asset, an investment that performs better when investors have confidence in the economy and are willing to take more risk, Lucas said.
“The Trump administration may be pro-crypto, but tariffs and tight monetary policy outweigh the positive vibes,” Lucas said. “And it’s also just a reminder, especially for people working in crypto, that macroeconomic forces really matter more than political positions.”
In November, bitcoin suffered its biggest price drop since 2021, bringing the coin’s value below $81,000. While bitcoin regained some of that value in the weeks that followed, the digital token began December with another decline, falling 6% after Strategy, the largest bitcoin holder, cut its profit forecast due to falling cryptocurrency prices. The price of Bitcoin now hovers around $90,000, up from previous years but significantly below its peak.
During the first days of December 2025, Eric Trump’s crypto company, American Bitcoin Corp, saw 40% of its value – around $1 billion – disappear.
The Trump family scion put on an optimistic face and said he would overcome the decline. “I own all my @ABTC stock – I’m 100% committed to leading the industry,” Eric Trump said on X at the time.
Some experts fear the industry is entering what’s called a crypto winter, a prolonged period of stagnation or losses. The last time the crypto winter lasted from late 2021 to 2023, when FTX tycoon Sam Bankman-Fried was tried and convicted. In those years, the price of bitcoin fell by 70%.
Despite the optimism fueled by Trump’s victory, the current market slowdown shows that the crypto-friendly administration was not enough to usher in a return to the “retail trading madness” of 2021, when there was a huge recovery in trading of individual stocks, said Christian Catalini, founder of the MIT Cryptonomics Lab.
“The recent crash is not a change in sentiment, but a collision of three structural factors: the aftershocks of $19 billion in leverage in October; a rotation of risk aversion driven by tariff tensions between the United States and China; and, above all, the potential collapse of corporate cash trading,” Catalini said.
Another potential factor that may have shaken the crypto market is the falling share price of AI stocks like Nvidia, Lucas said.
“One of the reasons why Bitcoin is linked to the AI cycle is that many Bitcoin miners have started to devote their energy to new data centers,” she said. “Not only is crypto a technical asset, but miners are actually tied to the expanding AI devices. This negative sentiment tends to creep into crypto.”
Despite concerns over a crypto winter, notable players in the crypto space Larry Fink, CEO of investment management firm BlackRock, and Brian Armstrong, co-founder of Coinbase, the largest crypto exchange in the United States, expressed optimism about the long-term value of the currency at a recent New York Times conference. Armstrong said that “there was no chance” that the price of Bitcoin would reach zero and that in fact, 2025 would be seen as the year “that crypto moves from the 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 this decline in crypto prices was not inconsistent with the Bitcoin cycles of the past four years and that she was not worried about entering a much more sustained crypto winter.
“If I look at it from the perspective of a traditional Bitcoin cycle, we are actually technically in a bear market,” Lucas said. “But as you can see, even with all these macros affecting the market, bitcoin still managed to price itself above $80,000.”
