Crypto Market Plummets 25% Post-Trump Inauguration

The cryptocurrency market has experienced a significant downturn since the beginning of 2025, with some investors labeling it the most challenging cycle in history. Disappointment over industry policy changes and the memecoin craze in the United States, along with speculation about talent leaving the sector for other industries, has contributed to this sentiment. However, despite the current grim outlook, many community members remain optimistic, asserting that the current cycle is not the most brutal on record.

Trezor analyst Lucien Bourdon, who has witnessed multiple cycles, views the current downturn as a natural part of the process. The recent decline in crypto markets followed Bitcoin's all-time high above $106,000 in December 2024, driven by optimism surrounding Donald Trump’s victory in the US presidential election. Some investors, such as BitMEX co-founder Arthur Hayes, accurately predicted a crypto sell-off following Trump’s inauguration on January 20. Since then, Bitcoin has dropped more than 18%, and the total crypto market capitalization has erased almost all gains from Trump’s election win, falling by 25%.

Investors offloaded about $4.6 billion from crypto exchange-traded products by March 7, and the spot market saw even more outflows, with at least $1 billion in liquidations in a single day on March 3. However, the most recent sell-off is not the worst on record. Trezor’s Bourdon highlighted the 2014–2015 cycle as possibly the most brutal, referencing the collapse of the Mt. Gox crypto exchange, which suffered an 850,000 BTC loss in a security breach in 2024. This event wiped out 70% of Bitcoin’s trading volume, leading to an 85% drawdown in a market with no institutional support and far less liquidity.

Brett Reeves, head of BitGo’s European sales, emphasized that the current market situation involves more than just falling prices. He noted significant advancements in global crypto products and regulation, indicating that crypto assets are increasingly becoming integral to the international financial system. Despite the current price crashes, Reeves believes in the long-term potential of the crypto space. Some industry executives even view the current market cycle as a bull market. Quantum Economics founder Mati Greenspan sees this bull market as unique because it is the first time prices have risen without copious money printing, describing the current pullback as short-term pain for long-term gain.

Crypto analyst Miles Deutscher argues that traditional market terms like “bull market,” “bear market,” “cycle,” or “altseason” are not suitable for the current market situation. He believes the market has evolved into something different, reflecting the ongoing changes and advancements in the crypto industry. Despite the challenges, the community's resilience and the industry's progress suggest that the current cycle, while difficult, is not unprecedented and may pave the way for future growth.