Camilla Jessen
It was meant to be a turning point for digital assets in the United States. Four months later, that optimism has sharply reversed.
Donald Trump returned to the White House pledging to make the US “the crypto capital of the world.”
He appointed industry-friendly regulators, backed landmark crypto legislation and presided over a rally that pushed Bitcoin close to $126,000 in October 2025.
That surge has since evaporated.
Bitcoin fell to around $60,000 this week, wiping out all gains made since Trump’s November 2024 election victory.
For many retail investors, the losses have been severe.
Leverage turns toxic
According to NPR, the post-election rally encouraged widespread leveraged trading, with investors borrowing to amplify their bets. The strategy magnified gains while prices rose, but left traders exposed when sentiment shifted.
Market nerves spiked after Trump threatened a 100% tariff on Chinese imports on 10 October.
Selling accelerated, triggering forced liquidations.
Coinglass data cited by NPR shows more than $2 billion in crypto positions were wiped out in a single week.
Michael Burry warned that further declines could “set in motion a death spiral leading to massive value destruction.”
Ben Schiffrin of Better Markets told NPR: “Bitcoin is anything but safe. It’s the most speculative asset, and I think people are realising that.”
A deal under scrutiny
As investors absorbed losses, attention turned to a $500 million deal involving World Liberty Financial, a crypto firm co-founded by Trump’s sons.
The Wall Street Journal reported that Abu Dhabi-linked investors agreed to buy a 49% stake just days before Trump’s January 2025 inauguration.
ABC News reported that roughly $187 million went to Trump family entities, with at least $31 million linked to companies tied to Middle East envoy Steve Witkoff. Congressman Ro Khanna has launched an investigation, warning the deal “may even represent a violation of multiple laws and the United States Constitution.”
The company denied any political connection, calling it a routine transaction.
No safety net
Treasury Secretary Scott Bessent rejected bailout speculation outright. “I do not have the authority to do that,” he told lawmakers.
Bitcoin dropped further after his remarks, Yahoo Finance reported.
Meanwhile, stalled legislation and growing ETF outflows have left investors without clear regulatory protection.
Analysts at 10X Research said: “In the absence of a clear catalyst, there is little urgency to step in.”
Trump promised transformation. For many investors, the lesson has been far more familiar.
Sources: NPR, Wall Street Journal, ABC News, Yahoo Finance, Coinglass, CryptoQuant, International Business Times
