Less than 12 months following their pledge to be the first ever ‘crypto president’ , Donald Trump presided over the largest crash in history. cryptocurrency .
Since he assumed office on 20 January, more than $1.3 trillion has evaporated from the markets – marking the largest decline over an 11-week span ever recorded. bitcoin ’s inception in 2009.
The most recent selling spree has occurred against the backdrop of widespread market unrest following President Trump’s announcement of his 'Liberation Day' trade tariffs last week, sparking further volatility. concerns about a worldwide economic slump .
However, Bitcoin's price drop started on Inauguration Day, declining from a peak of $109,000 in late January down to less than $75,000 by Monday.
The top cryptocurrency has returned to the value it had when Trump secured the U.S. presidency in November. The ensuing price surge was driven by his pledge to implement supportive crypto policies after taking office.
During the Bitcoin 2024 Conference held in Nashville last July, the Republican nominee stated his intention to establish a bitcoin treasury. He also vowed to shield the cryptocurrency sector from "Elizabeth Warren and her team," as well as guarantee that "the rest of the bitcoins [are] produced within the USA."
Since assuming power, Trump’s policies have predominantly had negative effects on both the price of bitcoin and the broader cryptocurrency sector. An executive order issued in March aimed at setting up a strategic Bitcoin reserve – signed prior to the inaugural White House Crypto Summit – was deemed unsatisfactory by certain observers.
Agne Linge, who leads growth at the digital bank WeFi, informed The Independent that investors viewed this action as "a gimmick" since no fresh bitcoins were acquired through this process.
The introduction of his own meme coin in January has further eroded confidence in the sector, with investors in $TRUMP and $MELANIA experiencing losses. a total of £1.5 billion in losses His support for a memecoin has introduced complexities into the regulations within this sphere and has also lent credibility to an occurrence where tens of thousands of new tokens have been flooding the market every week.
Dogecoin, the pioneering meme coin, has experienced significant decline since President Trump took office, losing over sixty percent of its value in just eleven weeks.
Several prominent cryptocurrencies like Cardano, Ethereum, and Solana have experienced a price drop of over 50 percent.
The most recent downturn, triggered by Trump’s newly declared tariffs, might signal the start of a prolonged downward trend, say certain experts, owing to the impact of conventional financial markets.
Asian markets experienced their steepest decline in years, whereas the FTSE 100 reached its lowest point over the past twelve months on Monday. Notably, billionaire hedge fund manager Bill Ackman, who supported Trump previously, said Over the weekend, it was suggested that new tariffs ranging from 10% to 50% on all imports into the U.S. might result in a "self-inflicted, economic nuclear winter" with recovery potentially taking several decades.
Bitcoin and the broader cryptocurrency sector generally follow the trends seen in stock markets, as investors seek to unload volatile holdings when the economy becomes uncertain.
"The recent events have shown yet again that digital assets tend to move closely alongside conventional financial markets when volatility surges," said Javier Rodriguez Alarcon, the Chief Commercial Officer at crypto financing company XBTO Global. The Independent .
Although the idea that Bitcoin serves as an insurance policy against fluctuations in conventional financial markets is gaining acceptance across various sectors, the rapid decline in both Bitcoin prices and stocks demonstrates that cryptocurrency typically behaves similar to other risky investments when unexpected events unsettle most traders.
Despite bitcoin’s sudden price drop, Alarcon and other industry experts pointed to the cryptocurrency’s utility as a long-term store of value.
The cryptocurrency boasts a capped supply – with just 21 million bitcoins slated to be created – drawing parallels to scarce resources such as gold, which is presently close to reaching all-time high values.
"Although the current Bitcoin price activity isn't mirroring conventional safe-havens such as gold, this doesn't negate its possible value," said Seamus Rocca, executive director at Xapo Bank. The Independent .. who stated that Bitcoin’s future wouldn’t be shaped by an individual’s monetary strategy.
“Let’s not feed hysteria and dismiss the long-term value that bitcoin represents after a couple of turbulent days... Bitcoin is still in its early stages, evolving into a digital alternative to gold. It may not fully act like a hedge today, but over the long term, it’s increasingly positioned to fulfill that role.”
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