The impact of ‘crypto president’ Trump on the biggest crash in history

Less than a year after proclaiming himself as the potential first ‘crypto president,’ Donald Trump has presided over the most significant crash in the history of cryptocurrency. With over $1.3 trillion disappearing from the market since he assumed office on January 20, this marks the most substantial decline over an 11-week period since the inception of bitcoin in 2009.

The recent market turmoil sparked by Trump’s ‘Liberation Day’ trade tariffs has only exacerbated the situation, leading to fears of a global economic downturn. However, the descent in bitcoin’s price actually started on his inauguration day, plummeting from a peak of $109,000 in late January to less than $75,000 by Monday. Remarkably, the leading cryptocurrency has now regressed back to the level it was at when Trump clinched victory in the US presidential elections in November.

During the Bitcoin 2024 Conference in Nashville last July, Trump promised to establish a bitcoin treasury, shield the crypto industry from threats such as ‘Elizabeth Warren and her goons,’ and foster domestic production of the remaining bitcoin. Despite these assurances, Trump’s actions in office have instead negatively impacted bitcoin’s price and the broader crypto sector. For instance, an executive order in March aimed at creating a Strategic Bitcoin Reserve, unveiled just before the initial White House Crypto Summit, was viewed as inadequate by some industry figures.

The launch of Trump’s meme coin earlier in January has further added to the erosion of trust within the crypto domain. As holders of $TRUMP and $MELANIA faced collective losses of $2 billion, the backing of a meme coin has complicated regulatory efforts and unwittingly endorsed a trend that sees a multitude of new tokens entering the market weekly. Notably, pioneers like Dogecoin have suffered massive losses since Trump’s presidency commenced, shedding over two-thirds of their valuation in the last 11 weeks.

Moreover, other major cryptocurrencies like Cardano, Ethereum, and Solana have experienced more than a 50 percent collapse in their value. The recent downturn, caused by Trump’s latest tariff announcements, could potentially mark the start of a prolonged downward trajectory, driven by the impact of traditional financial markets. As Asian stocks endure significant declines and the FTSE 100 index slumps to a yearly low, billionaire hedge fund investor Bill Ackman warned of a potential ‘self-induced, economic nuclear winter’ that may necessitate decades to overcome.

Despite the immediate plunge in bitcoin’s price, industry experts like Javier Rodriguez Alarcon emphasize the cryptocurrency’s value proposition as a long-term store of wealth. With a fixed supply of just 21 million bitcoins ever to be circulated, bitcoin draws parallels to finite assets like gold, which is currently approaching record highs. Notwithstanding the volatility in recent market events, the assured scarcity of bitcoin underscores its utility as a lasting investment option.