Trump spooks Bitcoin: Why cryptocurrency prices are falling and what’s next

Contents

• Rise and fall of cryptocurrency market
• New Bitcoin outlook
• Market crisis and possible trend reversal

Rise and fall of cryptocurrency market

After Donald Trump won the US presidential election, Bitcoin hit a new all-time high, rising from $68,000 on November 5 to more than $90,000 on November 13. Bitcoin crossed the psychological $100,000 mark in December. All this happened thanks to Trump’s campaign promises to make the US the world leader in crypto assets and to start storing Bitcoin reserves.

Two days before his inauguration, Donald Trump surprised the community even more by becoming the first world leader to launch his cryptocurrency $TRUMP. And just a day later, his wife Melania announced the launch of her memecoin $MELANIA. Both crypto assets grew rapidly until the day Trump was to officially return to the White House.

The price of the TRUMP token was initially around $3 per unit, but quickly rose to $70 in just a few days, reaching a peak market capitalization of around $14 billion. At the same time, 80% of the total supply of coins is controlled by companies associated with Donald Trump.

The cryptocurrency $MELANIA, quickly reaching a market capitalization of $2 billion, caused temporary volatility in the price of $TRUMP, which fell from $75 to $30 before stabilizing in the range of $55–64.

However, since Donald Trump never mentioned Bitcoin or his token in his inaugural speech, the cryptocurrency market experienced a significant drop for the first time in 2025. In particular, $TRUMP and $MELANIA updated their first historical lows of $25 and $4 per coin, respectively. Currently, the value of $TRUMP is $18 and $MELANIA is $1.5. Despite this, according to Coinbase chief product officer Conor Grogan, Trump could have made more than $800 million from his token.

New Bitcoin outlook

Amid Trump’s new cryptocurrency orders, the market began to recover on January 23. In particular, he will create a presidential task force on digital asset markets. It is tasked with developing a federal regulatory framework governing digital assets, including stablecoins, and evaluating the creation of a strategic national reserve of digital assets.

The task force will be led by White House AI and Cryptocurrency Director David Sachs. It will include the Treasury Secretary, SEC Chairman, and other department heads, as well as leading experts in the field of digital assets and markets. In addition, Trump’s son Eric promises zero capital gains tax for American crypto in the future, while foreign projects will pay 30%.

At the same time, the CEO of the cryptocurrency platform for payment systems Ripple, Brad Garlinghouse, said that he had held talks with Trump about making XRP (the company's cryptocurrency) a strategic reserve asset of the United States. Subsequently, the US Securities and Exchange Commission (SEC) removed all legal cases related to Ripple. These decisions had a positive effect on the growth of both XRP and other cryptocurrencies.

Market crisis and possible trend reversal

However, within a few days, world markets fell under the pressure of ChatGPT's main competitor - the Chinese artificial intelligence company DeepSeek. The emergence of a new player caused panic in the technology segment of the stock market.

For example, NVIDIA, which produces the most powerful microchips in the world, suffered the largest one-day loss in history, which reached $ 600 billion from the company's market capitalization, which led to a decrease of $ 1 trillion in the US technology sector.

The cryptocurrency market reacted to this news with a very strong decline. The fall in the price of Bitcoin to $100,000 occurred after the coin reached a peak of over $108,000 last month. And the bearish (pessimistic) sentiment among retail and institutional investors intensified in the market. The price of Bitcoin is a barometer of market sentiment and trends. If Bitcoin falls, the market usually follows it.

However, in February the market came under a new blow due to Trump's statement on the introduction of tariffs on goods from Canada, Mexico, and China. Financial analyst Andrii Shevchyshyn told RBC-Ukraine that not only the stock and crypto markets reacted to the risk of a trade war, but also almost all currencies, except the US dollar, even gold began to decline.

"The strengthening of the dollar is due to the outflow of capital from falling stock markets and bonds. Investors are withdrawing money from risky assets, in particular from cryptocurrencies. Although the price of Bitcoin is falling, it remains in a stable corridor, as Bitcoin-ETFs effectively support the market, buying up the dips. Unlike altcoins, which can fall by 50%, Bitcoin remains stable, because it is an already established business," emphasizes Shevchyshyn.

Although Bitcoin is the most stable cryptocurrency, it still fell to $92,000. But thanks to the news that Trump agreed with Canada and Mexico to postpone 25% tariffs for a month, Bitcoin was able to return to $99,000.

The situation is much worse for altcoins - cryptocurrencies that are an alternative to Bitcoin and Ethereum. In 2025, many investors and analysts expected an "alt season" - a rapid growth of all altcoins. However, technical analyst Ali Martinez has already stated that this will not happen due to the huge number of altcoins on the market - more than 36 million, compared to 3 thousand in 2017-2018. According to him, such many coins seriously affect liquidity, which can lead to a lack of investment in many altcoins, which, as a result, may simply disappear.

Some experts have already begun to express the opinion that the crypto market can completely change the trend from bullish (growing) to bearish (falling) within a year. Economist Danylo Monin, in a comment for RBC-Ukraine, noted that the apathy caused by the biggest collapse could lead to a new decline. However, according to the experts, it is hardly worth expecting sharp drops. Most likely, the market will experience slow stagnation until external factors create new grounds for optimism.

"Uncertainty is high, and we can only predict different scenarios. Bitcoin can hold steady, as significant reserves have already been formed. If it falls by 50%, it will become an issue that will affect the global financial situation, as cryptocurrency has become an important tool in economic policy," notes Andrii Shevchyshyn.

Due to the recent market collapse, $2.1 billion in trader deposits could have been liquidated in one day on the Bybit crypto exchange alone, the exchange's owner Ben Zhou said on February 3. According to him, the total volume of liquidations on the market in 24 hours is estimated at $8-10 billion.

Sources: comments from financial analyst Andrii Shevchyshyn and economist Danylo Monin, as well as data from X, Decrypt, Finbold, The Street, and The New York Times.