Trump gave crypto the red-carpet treatment. It’s crashing anyway
Trump’s Crypto Gambit: A High-Flying Start, A Steep Decline
Trump gave crypto the red carpet – President Donald Trump’s recent embrace of cryptocurrencies has sparked both admiration and skepticism. While his administration’s shift toward supporting digital assets has been met with enthusiasm by industry insiders, the market has since taken a dramatic downturn. The president’s personal financial ventures in the space, particularly his family’s crypto-related business, have generated substantial returns, yet the broader crypto sector now faces a steep correction. This raises questions about the sustainability of Trump’s influence on the market and the long-term viability of the industry’s newfound political backing.
The Crypto Boom and Trump’s Role
When Trump first entered the White House in 2017, he was a vocal skeptic of cryptocurrencies, dismissing them as “a scam.” But by 2024, his stance had transformed. As he campaigned for re-election, Trump positioned himself as a champion of the digital asset revolution, vowing to position the United States as the world’s “crypto capital.” His promises of regulatory support, coupled with a flurry of campaign donations from crypto firms, signaled a significant pivot. For the industry, this shift promised a new era of legitimacy and growth. Yet, the market’s rapid ascent and subsequent crash reveal a more complex narrative.
Trump’s family’s crypto operations have become a focal point of the industry’s financial success. According to the latest financial disclosure report, the venture amassed over $1 billion in revenue the previous year, adding to the family’s considerable earnings from real estate. However, the crypto sector’s mixed fortunes underscore the challenges of relying on a single political figure for stability. While the White House has actively promoted the industry, the market’s volatility has cast doubt on whether this support translates to lasting gains.
The Peak and the Fall
Bitcoin, the most prominent cryptocurrency, reached new heights during Trump’s second term. The token’s value surged more than 80% in the year following his 2024 election, peaking above $126,000 in October 2025. This rally was fueled by the president’s commitment to reducing regulatory barriers and fostering a favorable environment for crypto. Industry leaders celebrated the change, seeing Trump as a potential ally in their quest for institutional credibility. Yet, the subsequent collapse of Bitcoin’s price has exposed the fragility of this support.
As of this week, Bitcoin has fallen below the $60,000 mark, a decline of over 50% from its peak. Despite Trump’s efforts to lay the groundwork for crypto’s expansion, the market has taken a sharp turn. Analysts note that the crash follows a period of speculative fervor, driven by investors shifting funds into AI and other high-risk assets. The crypto industry’s reliance on political momentum has created an illusion of stability, but the recent downturn suggests that the foundation may not be as solid as it appears.
Regulatory Overhaul and Industry Backing
Over the past two years, Trump’s administration has implemented measures to bolster crypto’s position in the financial landscape. The White House has appointed officials aligned with the industry at the Securities and Exchange Commission (SEC), signaling a departure from previous regulatory scrutiny. Additionally, proposals for a “strategic bitcoin reserve” have been introduced, aiming to stabilize the token’s value through government backing. These steps have been hailed as a major victory for crypto advocates, who have long sought clearer guidelines and reduced oversight.
Trump’s public engagement with the sector has further cemented its appeal. He hosted a White House summit for crypto leaders, organized a celebration for investors in his memecoin, and championed two bipartisan bills designed to streamline the issuance and trading of digital assets. These actions have been interpreted as a sign of the administration’s commitment to crypto’s future. However, critics argue that the focus on political favorability may have overshadowed the industry’s structural issues, such as its association with fraud and volatility.
Questions of Legitimacy and Conflict of Interest
While the Trump family’s crypto ventures have thrived, the perception of legitimacy remains a point of contention. Hilary Allen, a law professor at American University and vocal critic of the industry, highlighted this paradox. “They’ve given them everything they could possibly want,” she said, referring to the regulatory and political support provided by the administration. “But the Trump family ventures have not ameliorated the perception that crypto is scammy.”
“The Trump family ventures have not ameliorated the perception that crypto is scammy.” – Hilary Allen, law professor at American University
Allen’s remarks reflect the broader skepticism surrounding Trump’s crypto initiatives. Despite the administration’s efforts to legitimize the sector, the industry’s reputation for risk and fraud persists. The SEC’s decision to scale back enforcement actions against companies tied to the Trump family has been seen as a concession, but it also raises concerns about the politicization of regulatory oversight. Critics argue that the lack of stringent scrutiny may lead to complacency, allowing dubious practices to continue unchecked.
Trump’s Defense of His Financial Moves
When asked about concerns over profiting from his administration’s policies, Trump dismissed the notion, attributing his success to broader market trends. “Everybody’s profiting,” he stated, during a press briefing at Joint Base Andrews, emphasizing that his financial gains are a reflection of the booming stock market rather than direct political favor. The White House has echoed this sentiment, maintaining that the president’s role in the economy is separate from his personal ventures.
This defense has been a recurring theme in Trump’s public statements. He has consistently asserted that his business acumen and the favorable economic climate have driven his wealth, not his political position. Yet, the stark contrast between his public narrative and the market’s performance has left many questioning the extent of his influence. While the stock market has indeed surged, the crypto sector’s decline suggests that Trump’s support may not be a universal solution to market instability.
The Memecoin’s Struggles and Industry Challenges
Even Trump’s most ambitious crypto projects have faced setbacks. His memecoin, launched shortly before his 2024 inauguration, was once a symbol of his digital ambitions. However, it has since lost 98% of its value, with the Trump family’s latest filing revealing that they earned $635 million from a licensing agreement tied to the asset. This sharp drop highlights the risks inherent in the sector, where hype often precedes reality.
Cryptocurrencies, though decentralized and digital, have largely operated on the fringes of traditional finance. Their acceptance as a mainstream medium of exchange remains limited, and their value can fluctuate wildly. While Bitcoin has historically mirrored the movements of risk assets like tech stocks, the recent market trends suggest that crypto’s trajectory is increasingly influenced by factors beyond its own fundamentals. The industry’s reliance on political figures like Trump has created a precarious balance between support and scrutiny.
As the crypto market continues to navigate this uncertain terrain, the question remains: Will Trump’s efforts to reshape the sector endure, or will they be seen as a fleeting chapter in a broader story of market cycles? The answer may depend on how the industry evolves in the wake of its high-profile association with the former president. For now, the crash serves as a reminder that even the most enthusiastic endorsements cannot guarantee immunity from market forces.
