The crypto crash occurred under Donald Trump as president and Paul Atkins as chairman of the Securities and Exchange Commission.
Conclusion
- The crypto market crash occurred during Donald Trump’s presidency.
- It also fell under Paul Atkins despite friendly rules.
- Trump’s second term has been marked by uncertainty, particularly on trade.
The crypto crash happened under Donald Trump
Bitcoin (BTC) has already erased all gains made during the Trump presidency and is now trading at its lowest level since October 2024. Altcoins fared worse, with some notable names like Shiba Inu and Cardano near 2022 lows.
The ongoing fall of crypto is remarkable because the industry has strong headwinds. President Trump is the most industry-friendly president, while Paul Atkins has taken a different approach than Gary Gensler.
For example, Gary Gensler has settled lawsuits against top companies such as Coinbase, Uniswap, and Ripple. He also took a friendly approach, including not initiating any lawsuits.
Washington has also adopted some friendly rules. It passed the GENIUS Act last year and is currently working on the CLARITY Act, which would separate the functions of the SEC and the CFTC.
There are several reasons behind the collapse of the crypto market under Trump. Analysts see the launch of Trump’s official coin as a major risk in the industry, as it has reduced liquidity significantly. The meme coin initially rose to $50 and then dropped to $5.
At the same time, geopolitical risks remain high in the Trump era. It ranged from his global tariffs to the current war in Iran, which has pushed crude oil prices to their highest level in years.
His tariffs have hampered inflation and prompted the Federal Reserve to be cautious in its monetary policy. This trend may continue in the near future as inflation is expected to rise now that crude oil and natural gas prices have risen more than 50% this year amid the war in Iran.
After the big liquidation event in October
The price of the crypto also fell amid its continued devaluation among investors, especially after the liquidation event that occurred on October 10 last year, when more than 1.6 million traders were wiped out.
More than 20 billion dollars were lost that day. Since then, open futures interest has fallen to $100 billion, while the weighted funds rate has largely moved sideways. The Crypto Fear and Greed Index has remained in the red for the past few months.
The crypto crash was also caused by the gridlock in Washington over the CLARITY Act, which has been stalled for the past few months. The block began when Coinbase withdrew its support, citing that the bill made it nearly impossible for crypto companies to pay stablecoin rewards.
Banks and credit unions argue that allowing these companies to offer bonuses would reduce their institutions’ impact on the broader economy.
