‘it Sucks’: Crypto Gets A Rude Awakening To Kick Off Trump’s Second Year

President Donald Trump’s golden age of crypto is starting to lose its luster.

A cryptocurrency rout that accelerated and wiped out billions of dollars in value this week is threatening what once looked to be the industry’s biggest opportunity ever: the era of the self-proclaimed crypto president.

Trump came back into power with the promise of forging a new path for the once-besieged industry in Washington by appointing friendlier regulators, pulling back on enforcement and crafting new rules for the market. All of which helped boost crypto to new highs in 2025, with bitcoin rising 35 percent to a peak of more than $126,000 in October.

But the market is now in its deepest decline since the crash of 2022. Fueled in part by broader investor concern over risky assets, bitcoin has plunged from its October high by nearly 50 percent — a fall that, as of early Friday, had wiped out all of its gains since Trump’s election. The token bottomed out Thursday at just over $60,000, before ticking back higher. What’s more, public companies that raced to buy up crypto tokens last year, such as Michael Saylor’s firm Strategy, have seen their stock prices crumble. And the sell-off is unnerving even the most fervent crypto believers.

“I’ve never seen people so dispirited about the crypto industry before, even at the lowest lows,” said Nic Carter, founding partner of the crypto investment firm Castle Island Ventures. “Psychologically, this feels really hard for people to handle.”

Wild price swings are a given in crypto. But this week’s crash is a reminder of the market’s potential dangers — not just for investors but also officials in Washington like Trump who have embraced crypto with open arms. The industry gave millions of dollars in the last election cycle to crypto-friendly candidates and lawmakers, handing it new influence as policymakers weigh rules and laws for the market. Much of that money went against Democrats. One crypto super PAC group known as Fairshake already has already built a war chest of more than $190 million ahead of this year’s midterm elections.

No longer is crypto a tiny corner of the finance world whose volatility is siloed off from the rest of the economy. The industry has become a major part of both the financial markets and Trump’s agenda. And one Trump rival is already taking a jab at the president over the tumble: Late Thursday, the press office for California Gov. Gavin Newsom, a likely 2028 presidential contender, wrote on X that “Bitcoin is currently trading for LESS right now” than when Trump said he would stop then-President Joe Biden’s crypto crackdown.

The fall also underscores Washington’s limited power over the gyrations of crypto prices, which are often driven by larger market moves. Treasury Secretary Scott Bessent, when asked this week whether he has the power to force banks to buy bitcoin, told lawmakers he doesn’t “have that authority.”

But crypto billionaires still have faith in Trump. On Strategy’s earnings call Thursday, Saylor, whose company popularized the playbook of buying up massive amounts of crypto tokens to boost its share price, told analysts, “I don’t think you can underestimate the importance of having support for the industry and digital capital at the very top of the political structure.”

“We have a bitcoin president,” Saylor said. “And he’s intent upon making America the bitcoin superpower, the crypto capital of the world and the leader in digital assets.”

The White House, for its part, isn’t deterred. In a statement, spokesperson Kush Desai said: “Volatility in a free market in which the government does not set prices is not going to change the Trump administration’s commitment to ensuring American dominance in cryptocurrency and other cutting-edge technologies of the future.”

Crypto's woes aren’t expected to hamper congressional efforts to set up new rules for the market, a long-standing industry priority. At a hearing Thursday, as crypto prices plunged, some Democrats, whose support for the bill will be needed for passage, signaled their appetite to find a path forward on the currently stalled legislation, a sign the industry hasn’t yet lost its sway in Washington. The bill would specifically set up new guardrails around the market and divvy up oversight between financial regulators.

And yet, in the meantime, the declines are hitting some of the industry’s best-known names in big ways.

Saylor’s Strategy on Thursday reported a net loss of $12.4 billion for the final three months of 2025. Hours earlier, Gemini Space Station, the crypto exchange founded by MAGA billionaires Tyler and Cameron Winklevoss, said it plans to cut up to 200 jobs around the world, while exiting certain markets like the United Kingdom, the European Union and Australia. And billionaire Michael Novogratz’s Galaxy Digital on Tuesday reported a net loss of nearly $500 million for the fourth quarter, far beyond what Wall Street banks expected.

“Anyone who’s been in crypto for more than five years realizes that part of the ethos of this whole industry is pain,” Novogratz told analysts.

Crypto is far from the only corner of the markets that is flagging. Technology stocks have been rocked in recent days as well, amid concerns about the job market, artificial intelligence spending and the future trajectory of interest rates. Entering Friday, the tech-heavy Nasdaq 100 was down almost 4 percent over the last week, while the broader S&P 500 dipped 2 percent.

“There’s a huge unwind in a wide range of speculative trades, certainly cryptocurrencies," said Steve Sosnick, chief strategist for Interactive Brokers. “The problem is when you have very crowded trades, it can get very messy when the psychology causes people to all head for the exits at the same time.

Not everyone is panicking. Rob Hadick, general partner at the crypto venture capital firm Dragonfly, said the market has weathered similar drawdowns before and that “fundamentals have never been stronger.” He pointed to the high use of stablecoins, or crypto tokens that are pegged in value to $1, and the climbing interest in crypto from traditional finance as examples.

But the tumble in crypto prices has rocked many investors — and the fallout may get worse. Companies that began buying up crypto tokens last year in a push to turbocharge their share prices, for example, could wind up having to dump them if the market continues to slide. That would only add to the downward pressure.

“They added gasoline to a flammable situation,” Sosnick said of such so-called digital asset treasury companies.

Others have begun to question bitcoin’s place in the global financial order.

The token was created by the pseudonymous Satoshi Nakamoto to be a form of digital gold for a world that has moved on beyond the U.S. dollar, said Carter of Castle Island. Yet, while physical gold has soared in value in recent months, bitcoin has floundered.

“It’s premised on the apocalypse. And now that the Book of Revelation is here, bitcoin isn’t doing what it was supposed to do,” Carter said. “The rapture didn’t happen, we’re just stuck here on Earth and it sucks.”