President Donald Trump, then on the campaign trail seeking re-election, speaks at the Bitcoin 2024 conference Saturday, July 27, 2024 in Nashville, Tennessee. Mark Humphrey/AP .
switch captionMark Humphrey/AP
It wasn’t supposed to be this way for the crypto industry.
President Trump won re-election on a promise to make the United States “the crypto capital of the world.” Since returning to office, he has appointed regulators known to be friendly to the industry, while the Republican-led Congress has passed legislation that many critics say is too lax for the sector.
And at first, crypto took off. Bitcoin’s value nearly doubled between Trump’s re-election in November 2024 and when it reached an all-time high of around $126,000 per coin in October 2025.
That was until everything fell apart. Bitcoin has been falling since its peak – and at one point this week fell to around $60,000, lower than it was when Trump was re-elected.
So what happened – and what happens next? Here are three things to know.
Big bets – and big losses
Trump’s re-election and investor optimism about a revolutionary era for crypto have created excitement – but it has also led to widespread speculation. Many not only traded cryptos, but also borrowed heavily to acquire even more.
All that borrowing generated profits when Bitcoin and other cryptos boomed. But as soon as the value of bitcoin started to fall, the opposite happened: it amplified the losses.
The moment that triggered this decline came on October 10, when Trump threatened to impose additional 100% tariffs on Chinese imports – on top of the 30% already in place. This scared traders, who abandoned a range of investments, from stocks to currencies.
Stocks eventually recovered – and then some. The Dow Jones Industrial Average, for example, hit its latest record high on Friday.
Attendees walk past the Bitcoin mascot during the Bitcoin conference at the Venetian Las Vegas in Las Vegas on May 27, 2025. Ian Maule/AFP via Getty Images .
switch captionIan Maule/AFP via Getty Images
But for crypto, the losses caused by all this borrowing and speculation have deeply shaken investors, reminding them of the volatility of the sector. And that created a contagion effect, where sharp declines prompted more and more people to sell.
For crypto critics such as Ben Schiffrin, senior policy director at consumer credit advocacy group Better Markets, the losses are long overdue.
“Bitcoin is anything but safe,” he says. “It’s the most speculative asset, and I think people realize that’s the case.”
The notoriously volatile history of crypto
The latest crash is reminiscent of the boom-and-bust cycle that has plagued the sector throughout its short history.
The crypto industry, for example, entered 2022 full of hope, as the pandemic helped spark a surge in trading from people stuck at home, leading to a frenzy that spurred all manner of speculative investments, from cryptocurrencies to digital tokens called NFTs.
But then a series of events, including rate hikes by the Federal Reserve, ushered in a period of intense volatility that ultimately led to the collapse of the cryptocurrency exchange FTX, which in turn triggered a severe downturn – or “winter,” in cryptocurrency parlance. In 2022, the value of bitcoin has fallen from around $50,000 per coin to less than $20,000. Bitcoin only really regained its footing at the end of 2024 with the re-election of Trump.
Likewise, in the months leading up to 2018, there was a frenzy of investment in initial coin offerings – in which cryptocurrencies were sold much like how companies sell shares in initial public offerings. After peaking in January 2018, the crypto market collapsed.
Efforts to make crypto more mainstream continue
It is unclear how long the current crisis will last, but for crypto investors, there is still hope as significant tailwinds are boosting the sector.
Perhaps most significant is the sea change in the regulatory environment for cryptos.
Last year, Trump chose Paul Atkins, a consultant who has worked with the crypto industry, as chairman of the Securities and Exchange Commission, placing a crypto supporter at the helm of the main federal agency that oversees the financial sector.
Meanwhile, Congress passed the nation’s first major crypto legislation, establishing rules for a growing area of crypto called stablecoins — digital currencies that allow nearly instantaneous transfers between parties anywhere in the world.
This is a major legislative victory for the crypto industry, which has spent hundreds of millions of dollars in 2024 to elect pro-crypto lawmakers.
Another major bill that would determine, among other things, which regulator will oversee the sector, is stalled in the Senate, but the crypto industry continues to push for its eventual passage.
Bitcoin and other cryptocurrencies may currently be in the midst of a recession, but investors remain hopeful that the Trump administration will continue to lay the groundwork for a crypto revolution.
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