Trump Promised a Crypto Revolution. So Why is Bitcoin Crashing?

Trump got vowed to make the U.S. "the crypto capital of the world." Since he retook office he has appointed regulators known to be friendly with the industry, while the Republican led Congress has passed legislation that many critics believe goes too easy on the sector. At first, crypto soared with the value of bitcoin nearly doubled between when Trump was re-elected in November 2024 and when it reached an all-time high of around $126,000 per coin in October 2025.

However, with most thing Trump does it takes time for things to fall apart and we have now reached that point with it all coming crashing down last week. Bitcoin has tumbled dropped to around $60,000, lower than it was when Trump got reelected, but has revocered to just over $70,000 as I'm writing the post.

So what has happened? When Trump took office investors' optimism about a game-changing era for crypto created excitement which caused prices to surge. Many borrowed heavily to scoop up crypto which created even more risk. As soon as the value of bitcoin started falling, the reverse happened and it magnified the losses as we saw last week. The unwind was fast, but it wasn’t random. What we saw was the classic end of a leverage-driven rally. When prices were rising, borrowed money amplified gains and pulled in even more participants chasing momentum. The leverage works both ways. As soon as bitcoin slipped below key psychological levels, liquidations cascaded across the market. Margin calls forced selling, forced selling pushed prices lower, and panic did the rest.

Another factor weighing on crypto has been the growing gap between expectations and reality. While the administration promised a golden age for digital assets, real adoption has moved much slower than the hype cycle suggested. Institutional inflows cooled, retail traders became more cautious, and regulatory clarity despite being “crypto-friendly” has not translated into the explosive growth many expected. Markets don’t run on promises forever.

The real question now is whether this is a temporary correction or the beginning of a deeper unwind. If leverage continues to flush out and macro conditions stabilize, bitcoin could build a base and recover over time. However, if risk appetite keeps fading and liquidity tightens further, we could see another leg down before the next true bull phase begins.