4 reasons why Bitcoin value is decreasing. (Hint: It’s related to Trump.)
Donald Trump’s ascension to the presidency in 2024 was anticipated to mark a new era of prosperity for cryptocurrency enthusiasts.However, the recent decline in Bitcoin’s value by nearly 20 percent since Trump took office has sparked questions about the cause behind this downturn. Despite the known volatility of the cryptocurrency market, abrupt fluctuations are not uncommon. Nonetheless, both Bitcoin and the wider crypto market had been on a consistent upward trajectory, with values steadily increasing across the board. Notably, Bitcoin reached an unprecedented milestone by surpassing the six-figure mark following Trump’s election victory.
The launch of the $TRUMP memecoin right before Trump’s inauguration yielded massive profits for a select few individuals. While the token’s value skyrocketed from insignificance to around $75, making it arguably the most successful memecoin launch ever, the Trump family and its associates reportedly generated $100 million in trading fees without selling their $TRUMP holdings. However, for the average investor, $TRUMP proved to be a financial loss, with over 810,000 crypto wallets collectively losing $2 billion thus far. This, coupled with the failure of other Trump-affiliated meme coins like $MELANIA and $LIBRA, has resulted in significant capital being drained from the crypto market.
The impact of such meme coins failures has been especially harsh on other memecoins as investors hastened to move their funds away from these tokens to mainstream ones, affecting Bitcoin’s performance to some extent. Trump’s stance on supporting the crypto industry has yet to live up to expectations. While Trump has taken a few steps like dropping a lawsuit against Coinbase and issuing an executive order to encourage crypto use, his overall engagement with the crypto community has fallen short. Investors are turning cautious as Trump’s actions appear to benefit specific companies while making pledges with little substantial outcome for the industry at large. With doubts arising from Trump’s utilization of the meme coin for personal profit, the sentiment towards Trump and cryptocurrency among investors has started to shift.
The recent security breach at Bybit, resulting in the theft of approximately $1.5 billion, reflects the growing threat posed by hackers and scammers targeting crypto exchanges. While Bybit has attempted to compensate affected users through loans and large deposits, customer trust in the platform has eroded, leading to significant withdrawals. These security incidents have only heightened apprehensions among investors already grappling with market uncertainties.
Trump’s economic policies, which have been marked by sudden shifts, rising costs, impending tariffs, and workforce layoffs, have contributed to the overall economic unease. The prevailing market volatility extends beyond traditional investments to crypto, debunking the notion that cryptocurrency operates in isolation from broader market trends. While hopes are pinned on Trump’s promises of reduced regulation in the crypto sector, the pressing concern remains whether investors will have sufficient resources to capitalize on these opportunities amid the turbulent economic landscape. The resilience of the crypto market in the face of these challenges remains to be tested in the days ahead.
