politicalrisk

When Donald Trump won the election, the cryptocurrency market reacted with extraordinary optimism. $BTC surged past $100,000, price targets of $200,000 became mainstream discussion, and sentiment across the ecosystem turned decisively bullish. For a brief period, it felt as though crypto had entered a new era.

Today, Bitcoin is trading near $66,000—approximately 42% below its peak—and market sentiment has shifted dramatically. The contrast between expectations and reality over the past few months offers a revealing case study in how political narratives can influence, and ultimately disappoint, financial markets.

The Post-Election Euphoria

Trump’s victory was widely interpreted as a turning point for digital assets. The prevailing narrative was clear and consistent:

The United States would become the global hub for cryptocurrency
Regulatory pressure would ease, beginning with the removal of SEC Chair Gary Gensler
A Bitcoin strategic reserve was on the horizon
A comprehensive, crypto-friendly regulatory framework would follow

These expectations fueled an aggressive rally. Bitcoin broke through $100,000 with momentum, altcoins surged, and speculative assets across the market posted significant gains. For many investors, the period immediately following the election felt like confirmation that a historic bull cycle was underway.

The $TRUMP Coin Controversy

Shortly before the January inauguration, Trump launched his own meme token, $TRUMP . The announcement initially seemed implausible, yet the token rapidly reached a multibillion-dollar market capitalization within hours. Early participants saw extraordinary gains, and reports suggested that Trump and his affiliates earned hundreds of millions of dollars.

However, most investors entered after the initial surge. As the token collapsed, many suffered losses of 80–90%. These were not professional traders alone, but retail participants who believed that a token associated with a sitting president represented a uniquely safe opportunity.

Notably, there was no public response or acknowledgment from Trump following the crash—no statement, clarification, or expression of concern. The episode raised serious questions about accountability and the risks of conflating political authority with financial trust.

Policy Reality Sets In

Following the inauguration, some pro-crypto actions did materialize. Gary Gensler was removed, and several industry-friendly appointments were made. Yet the more ambitious promises—such as a Bitcoin reserve or sweeping regulatory reform—failed to appear.

Instead, attention shifted toward tariffs, trade disputes, and broader economic policies that unsettled traditional financial markets. As risk appetite declined, crypto followed. Bitcoin retraced steadily from $100,000 to $95,000, then $85,000, $75,000, and eventually $66,000, marking a clear end to the post-election rally.

A Broader Lesson for the Market

The TRUMP token episode stands out as a critical moment. Thousands of retail investors bought into the token under the assumption that a political figure—particularly a president—would not allow such a project to collapse without comment or consequence. That assumption proved incorrect.

More broadly, the experience underscores a recurring lesson in financial markets: political figures are not fiduciaries. They are not responsible for protecting investor capital, nor are they aligned with individual portfolios. Narratives, no matter how compelling, do not override market structure, liquidity cycles, or macroeconomic forces.

Where Things Stand Now

As of mid-February 2025, market conditions remain challenging. Bitcoin is down roughly 40% from its highs, many altcoins have declined further, and speculative enthusiasm has cooled significantly. While Trump remains publicly supportive of crypto, the transformational outcomes once anticipated have not materialized. Additional geopolitical and trade-related uncertainties now present further risks.

The conclusion is not that crypto is finished, nor that political engagement is irrelevant—but rather that markets must be evaluated on fundamentals, not promises. The post-election rally demonstrated how powerful narratives can be. The subsequent correction showed their limits.

Markets do not reward optimism alone. After a sharp and extended rally, corrections are not only possible—they are normal.
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