Trump’s crypto “golden age” throws away $2 trillion in profits, leaving those holding dollars as winners

The crypto market that surged on Donald Trump’s marketing campaign promise of a friendlier US posture is now again close to the place it began, after an 18-month spherical journey that added near $2 trillion in worth after which erased roughly the identical quantity.

Data compiled by CryptoSlate put the entire crypto market worth at about $2.4 trillion in October 2024, weeks earlier than the US election.

By November 2024, the market had pushed towards $3.2 trillion as merchants priced in a “coverage premium,” the expectation {that a} pro-crypto White House would imply lighter enforcement strain, clearer guidelines, and broader entry for each retail and institutional traders.

By early October 2025, the market peaked at $4.379 trillion.

As of press time, CryptoSlate’s market cap web page confirmed the worldwide market at about $2.37 trillion after a steep selloff.

Bitcoin, the sector’s bellwether, briefly fell to round $60,000 this week earlier than recovering to about $65,894. Ethereum, the second-largest crypto asset, traded close to $1,921 after sliding near $1,752 earlier in the week.

A professional-crypto pivot in the workplace

After Trump took workplace, the administration moved shortly to sign a reset, however those steps proved to be a shift in tone, not an instantaneous repair.

In late January 2025, Trump ordered the creation of a cryptocurrency working group to draft a regulatory framework for digital property and to judge a possible national digital asset stockpile.

The order additionally focused a US central bank digital currency, reflecting early emphasis on limiting federal involvement in retail digital cash whereas increasing room for private-sector tokens.

Banking coverage additionally moved. The Securities and Exchange Commission (SEC) rescinded Staff Accounting Bulletin 121, steerage that the crypto and banking industries had argued raised the price of custodying buyer crypto property.

In March 2025, the Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1183, reaffirming that national banks may provide crypto-asset custody.

This allowed these establishments to take part in sure stablecoin actions and interact with distributed ledger networks, eradicating a previous requirement for supervisory nonobjection earlier than continuing.

At the identical time, the Federal Deposit Insurance Corporation (FDIC) rescinded a 2022 notification requirement for FDIC-supervised establishments and clarified that banks could interact in permissible crypto-related actions with out prior FDIC approval.

By April 2025, the Federal Reserve withdrew sure steerage on financial institution crypto-asset and greenback token actions, together with rescinding a 2023 supervisory letter that established a nonobjection course of for such actions.

Notably, the FDIC and the Fed additionally withdrew two joint statements on banking organizations’ crypto-asset-related activities.

Meanwhile, a central legislative milestone arrived with stablecoins, the dollar-pegged tokens used extensively as settlement rails throughout crypto markets.

Congress handed, and Trump signed into legislation, the Guiding and Establishing National Innovation for US Stablecoins Act (the GENIUS Act) on July 18, 2025.

The legislation established a federal regulatory framework for cost stablecoins, outlined classes of permitted issuers, and set necessities and oversight for stablecoin issuance.

Interestingly, stablecoins weren’t the one goal of the Trump administration.

The US House handed the industry-backed CLARITY Act in July 2025, a market-structure invoice geared toward making a clearer federal framework for digital property and increasing the Commodity Futures Trading Commission’s (CFTC) oversight.

All of those developments helped create an atmosphere in which Bitcoin and the crypto {industry} thrive.

As a consequence, BTC’s worth reached a brand new all-time high of greater than $126,000, and the broader crypto {industry} market cap peaked at over $4 trillion.

From peak to retracement, as leverage and flows turned

Since the crypto {industry} peaked, the market has shed about $2 trillion, with greater than $1 trillion misplaced in the previous month.

Market contributors and analysts have largely described the most recent leg down as a mechanical unwind somewhat than a repricing of a single headline.

Matt Hougan, chief funding officer at Bitwise, argued that the drawdown ought to be learn as a pileup of forces, not a single perpetrator. According to him, markets are complicated, and pullbacks are often the results of a number of components appearing in live performance.

Considering this, Hougan’s place to begin was cyclical, not political. He stated long-term traders have been promoting to front-run what many count on from crypto’s four-year pattern, three huge up years adopted by a down yr.

The dynamic can change into self-fulfilling, he stated, as a result of traders who worry the cycle will repeat could determine to take beneficial properties early somewhat than maintain by a possible pullback.

While he acknowledged that measurement is imperfect, Hougan estimated that those traders offered effectively over $100 billion in Bitcoin final yr.

At the identical time, he described a fading of retail-style “consideration” flows that usually prop up speculative corners of markets in good instances.

Crypto, in his view, has confronted stiffer competitors for the highlight, with AI shares and, extra lately, treasured metals drawing capital that may in any other case have rotated into essentially the most unstable digital property.

While those traders can return, they’re at present a supply of demand that has partially stepped again from the {industry}.

Meanwhile, Hougan additionally pointed to how leverage turned this downshift right into a cliff. He cited the Oct. 10 $20 billion liquidation episode, which is the most important leveraged blowout in crypto’s historical past.

According to him, this was brought on by Trump’s shock announcement of a 100% tariff on all Chinese items at 5:30 p.m. ET on a Friday, when many conventional markets had been closed, and by merchants utilizing crypto to hedge danger.

This induced a marketwide sell-off that the crypto market has but to get well from.

At the identical time, Washington’s broader insurance policies and the macro backdrop have impacted Bitcoin.

Hougan cited Trump’s Jan. 30 nomination of Kevin Warsh to be the following chair of the Federal Reserve, a decide he stated was seen as hawkish.

He additionally flagged a separate supply of hesitation inside Bitcoin itself, with rising concern amongst some advocates that the neighborhood isn’t transferring quick sufficient to deal with the longer term danger posed by quantum computing.

Hougan stated quantum is a long-term danger and a solvable drawback, however he argued that till the event neighborhood takes concrete steps, a portion of long-term capital will stay cautious.

Finally, he stated the pullback has been bolstered by broad risk-off sentiment, pointing to a session in which BTC fell alongside sharp declines in gold and silver, with massive expertise shares additionally down considerably.

In that atmosphere, crypto nonetheless behaves like a high-beta proxy for danger urge for food, changing into susceptible when portfolios de-gross.

Who are the winners in the growth and casualties of the bust?

The growth part rewarded the core plumbing of crypto, companies that monetize exercise when costs and buying and selling volumes rise.

Exchanges and derivatives venues benefited as hypothesis returned. CoinGecko’s 2025 annual report estimated that centralized exchanges processed $86.2 trillion in perpetual futures quantity in 2025, whereas decentralized perpetuals hit $6.7 trillion.

In a growth, that construction operates like a toll highway, with larger volatility bringing larger charges and extra liquidations.

Stablecoin issuers additionally emerged as winners, as they’re anticipated to proceed rising even when token costs decline. This is as a result of merchants and establishments nonetheless want dollar-denominated rails to maneuver money, settle trades, and park funds throughout volatility.

In reality, Treasury Secretary Scott Bessent believes these property will change into a crucial buyer of US Treasuries in the approaching years as they proceed to quickly develop.

Meanwhile, the bust part has been harsher on companies with embedded monetary leverage and retail traders uncovered to the {industry}.

Public companies that stockpiled BTC and different tokens as a technique turned a focus as costs fell.

Shares of Strategy (formerly MicroStrategy), the bellwether of the company Bitcoin commerce, fell from $457 in July 2025 to as low as $111.27 on Thursday, the bottom since August 2024.

Strategy held 713,502 bitcoin at a median value of $76,052 per coin and posted a $12.4 billion quarterly loss as bitcoin’s decline pressured a repricing of its crypto-heavy stability sheet.

Other listed consumers additionally fell, together with the UK’s Smarter Web Company, Nakamoto Inc., and Japan’s Metaplanet, alongside companies tied to Ethereum and Solana methods and an organization that stated it could stockpile a Trump-family token.

That dynamic captures the core contradiction of the cycle.

Trump’s pro-crypto posture helped anchor the post-election bid and validated components of the political thesis by early government actions, shifts in banking steerage, and a stablecoin legislation.

But the market’s surge additionally accelerated the constructions that made crypto extra delicate to macroeconomic situations, ETF flows, and leverage-driven bubbles. So, when those forces turned, the identical “coverage premium” that lifted valuations proved simple to unprice.

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