Bitcoin Sheds Trump-Era Gains Amid Crypto Market Volatility
Bitcoin’s price trajectory has taken a significant hit, erasing the gains experienced during President Donald Trump’s administration. The cryptocurrency’s downturn is attributed to reduced liquidity and increasing market volatility. Experts predict this trend may continue in the near future.
Market Dynamics and Price Movements
Bitcoin’s market depth has decreased considerably, leading to larger price fluctuations. Research analyst Thomas Probst from Kaiko noted that reduced liquidity has resulted in more erratic price movements. “This contraction has been ongoing for several months,” he stated.
- Bitcoin fell below $61,000 for the first time since before Trump’s election.
- Prices dropped 20% on a Thursday but rebounded the following day.
- The cryptocurrency reached an all-time high above $125,000 in October 2025.
Impact of Federal Reserve Decisions
Investor concerns regarding inflated valuations in technology stocks have compounded the situation. The appointment of Kevin Warsh as the next Federal Reserve chair heightened fears of potential monetary tightening. This development adversely affected both precious metals and cryptocurrencies as demand for Bitcoin decreased.
Liquidity Concerns
The average market depth for Bitcoin—a key indicator of its trading capacity—has drastically declined. In 2025, it stood at over $8 million but has since fallen to around $5 million. Probst emphasized that this shrinking liquidity is concerning.
- Before October 2025, Bitcoin’s trading orders had minimal impact on price.
- Current trends indicate that even small trades can generate significant price movements.
Investor Sentiment and Opportunities
Despite the downward trend, some analysts believe the worst may be over. James Butterfill from CoinShares mentioned, “Investors might see this as an opportunity to buy the dip.” The selling activity from major holders, or “whales,” is also slowing, indicating a potential shift in investor sentiment.
The Trump Administration’s Crypto Policies
Trump’s administration initially fostered a favorable environment for cryptocurrency investment. After his election in November 2024, Bitcoin surged as policies were expected to support its growth. However, the anticipated measures, including a national Bitcoin stockpile, have not yet materialized as expected.
Although Trump signed an executive order to create a Bitcoin reserve from seized assets, a large-scale government Bitcoin acquisition has yet to occur. This realization has led to disappointment among some investors who anticipated more aggressive cryptocurrency policies.
Future Outlook
The crypto market remains sensitive to macroeconomic and geopolitical factors. As cryptocurrencies continue to represent a niche in global finance, the correlation between Bitcoin and traditional equity markets grows stronger, particularly during periods of market stress.
As we move forward, stakeholders in the cryptocurrency space will have to navigate through ongoing volatility and uncertainties impacting their investments.
