Why the 'Trump Rally' Couldn't Sustain Crypto Momentum: A Year of Gains Erased

The cryptocurrency market entered 2025 with optimism, but as the year winds down, nearly all gains have been wiped out. Bitcoin, which peaked at $126,080 on October 6, has since experienced a dramatic reversal. The collapse wiped out approximately $1 trillion in digital asset value over the following months, leaving investors questioning whether Trump administration policies could truly support the sector’s growth.

The October Turning Point: Tariffs Trigger Historic Liquidations

The market’s inflection came in mid-October when escalating tariff tensions rattled both traditional and crypto markets. The fallout was swift and severe—crypto markets recorded $19 billion in liquidations within a single 24-hour period, an unprecedented figure. Ethereum bore the brunt of the selloff, declining roughly 40% in the subsequent month. Even assets tied to prominent political figures saw significant value erosion as December progressed.

Market Deterioration and Recent Price Action

Bitcoin’s struggles intensified in November, when the asset briefly dipped below $81,000, marking its worst monthly performance since 2021. Currently trading near $91,170, Bitcoin remains locked in a volatile consolidation phase. Ethereum has shown more resilience recently, with a 3.11% monthly gain, suggesting some stabilization in the market.

Beyond Politics: Macro Factors Dominate

While the Trump administration maintains a generally crypto-friendly posture, analysts emphasize that geopolitical tensions, tightening macroeconomic conditions, and aggressive deleveraging in the market have proven far more influential than policy sentiment alone. The confluence of these factors has sparked discussions about an impending “crypto winter,” though some institutional observers view the correction as a natural part of Bitcoin’s traditional four-year cycle.

Long-Term Confidence Remains Intact

Despite near-term turbulence, major institutional voices remain bullish on crypto’s trajectory. Larry Fink, CEO of BlackRock, and Brian Armstrong, CEO of Coinbase, have both reiterated their conviction that institutional capital will continue flowing into digital assets. Their thesis centers on crypto’s gradual transition from regulatory ambiguity into mainstream finance—a structural shift that transcends short-term price volatility.

The 2025 market correction, while painful in the near term, may ultimately reflect the growing integration of crypto into the broader financial ecosystem rather than a fundamental loss of faith.