Donald Trump’s election in 2024 was supposed to usher in the golden age of cryptocurrency.
So, why has Bitcoin lost nearly 20 percent of its value since his inauguration?
Cryptocurrency is notorious for its volatility, so sharp declines and surges are not unexpected. However, Bitcoin and the broader crypto market have mostly seen steady growth, with values climbing across the board. In fact, Bitcoin even broke the six-figure mark for the first time following Trump’s election.
Here’s why Bitcoin is falling, and how much of it actually ties back to Trump.
$TRUMP actually hurt the crypto space
A few people made a lot of money when Trump randomly launched his $TRUMP memecoin just a few days before his inauguration. The token was technically the most successful memecoin launch ever as $TRUMP surged from basically worthless to around $75. The Trump family and its associates reportedly made $100 million in trading fees, without selling any of their $TRUMP holdings.
Crypto scammers are using Elon Musk’s DOGE to defraud people
However, for most average investors, $TRUMP was a loss. According to the New York Times, more than 810,000 crypto wallets have lost a combined $2 billion so far.
This, combined with other Trump-affiliated meme coin failures, like $MELANIA and the Argentinian President Javier Milei-promoted $LIBRA, has removed billions of dollars from the crypto market.
Mashable Light Speed
Other memecoins have undoubtedly been hit the hardest, as crypto speculators pulled their money out of other tokens, invested it in these mainstream ones, and then lost their money. However, you can guarantee that Bitcoin also feels reverberations from this.
Trump’s pro-crypto actions underwhelm so far
This is potentially a temporary effect, depending on if Trump pulls through for his crypto backers.
Money from the cryptocurrency lobby helped propel Trump to victory last November. In exchange, the crypto industry expected Trump to end federal government investigations into crypto outfits, ease regulation, and help pass pro-crypto laws.
Trump has delivered on a few things. For example, Trump’s SEC dropped its lawsuit against the U.S.’s largest crypto exchange, Coinbase. The president also signed an executive order shortly after his inauguration to broadly promote the use of crypto.
But, other than aiding very specific companies and vaguely promising to do something for the industry at large in the future, Trump hasn’t done much else. It’s been just over a month since Trump became president again, so he still has plenty of time to deliver for crypto. However, Trump hasn’t done enough for the fast-moving industry. With Trump extracting money from the industry for his own personal gain with his meme coin, investors aren’t feeling so bullish about Trump and crypto anymore.
The largest crypto heist ever
Roughly $1.5 billion has just been stolen from one of the world’s biggest crypto exchanges, Bybit. That’s the largest heist ever in crypto and amounts to more than half of all the crypto stolen last year. Hackers and scammers are targeting crypto more than ever, and security incidents like this aren’t helping ease investors’ concerns.
The biggest crypto heist ever: $1.5 billion stolen from Bybit cryptocurrency exchange
While Bybit has since made customers whole with the help of loans and large deposits, customers are still fleeing the platform. In just one night, as much as $5.3 billion was withdrawn from the platform.
With the market uncertain and investors distrusting those overseeing their holdings, crypto investors are withdrawing their money.
Trump’s economy
Speaking of market uncertainty, it’s not just cryptocurrency. Trump and Elon Musk’s mass firing of federal workers, economic policy that changes at Trump’s whims by the minute, rising costs of goods, and Trump’s constant threat of new tariffs have led to a very shaky economy. The markets are generally down, and despite some in the crypto industry pretending cryptocurrency is immune, crypto very much follows those same trends.
While Trump may deliver on crypto’s hopes for less regulation, the real question is whether people will have any money left to invest by the time he gets there. The crypto market will soon find out.
