Bitcoin COLLAPSES — Trump’s Promise DESTROYED

Bitcoins and Bitcoin-themed banknotes in various designs.

Bitcoin’s dramatic collapse from its October 2025 peak reveals how quickly the promises of President Trump’s “crypto capital” vision evaporated into a harsh reality of institutional abandonment and renewed federal tightening under his own administration.

Story Snapshot

Bitcoin plunged 37-44% from its $125,000 October 2025 peak to below $75,000, erasing post-election gains and triggering extreme fear among investors
Over $12 billion in institutional outflows from U.S. Bitcoin ETFs since November 2025 signal Wall Street’s retreat from the crypto market
Trump’s nominee for Fed chair, Kevin Warsh, advocates hawkish monetary policy that directly undermines the risk assets his administration promised to support
U.S. crypto adoption collapsed from 17% to 12% as retail investors flee to traditional assets amid stalled regulatory progress and mounting macroeconomic pressures

Trump-Era Crypto Promises Meet Harsh Economic Reality

Bitcoin traded around $78,500 in early February 2026 after briefly dipping below $75,000, representing a stunning reversal from the post-election euphoria that sent the cryptocurrency soaring more than 40% following Trump’s November 2024 victory. The President campaigned on transforming America into the world’s “crypto capital” and establishing a strategic Bitcoin reserve, energizing investors who believed regulatory relief was imminent. Instead, the digital asset has shed between 37% and 44% from its October 2025 peak of approximately $125,000, falling below pre-election levels and wiping out roughly $500 billion from the broader cryptocurrency market in recent weeks alone.

Institutional Investors Abandon Ship as ETF Outflows Accelerate

The most troubling signal for Bitcoin’s near-term prospects comes from unprecedented institutional retreat. U.S. spot Bitcoin exchange-traded funds have hemorrhaged more than $12 billion since November 2025, with over $7 billion exiting in November alone, followed by approximately $2 billion in December and more than $3 billion in January 2026. Deutsche Bank analyst Marion Laboure noted these sustained outflows demonstrate institutions are “losing interest” in crypto exposure, rotating capital into equities and traditional safe havens like gold instead. This institutional exodus amplifies volatility in thinning liquidity conditions, where large trades trigger outsized price swings that punish remaining holders.

Hawkish Fed Nominee Undermines Administration’s Crypto Agenda

President Trump’s nomination of Kevin Warsh to chair the Federal Reserve created an ironic policy collision that directly contradicts his pro-crypto campaign rhetoric. Warsh advocates for higher interest rates and a smaller Fed balance sheet, tightening monetary conditions that historically punish speculative risk assets like Bitcoin. The announcement in late January 2026 coincided with Bitcoin’s largest single-day decline since 2018, as markets interpreted Warsh’s hawkish stance as extending the higher-for-longer rate environment. Han Tan of Bybit Learn observed that “crypto bears are in control” as this macroeconomic headwind leaves Bitcoin with “scant catalysts” to reverse the downturn while retail investors are “wooed by mainstream assets” offering stability.

Regulatory Stalemate Erodes Confidence Despite White House Pressure

Despite Trump’s promises to deliver crypto-friendly regulations, Congress has stalled on passing the CLARITY Act, which the White House has urged lawmakers to finalize by the end of February 2026. This legislative gridlock leaves Bitcoin vulnerable to existing regulatory uncertainties around energy consumption and anti-money laundering compliance that industry participants cite as long-term drags on adoption. The failure to deliver substantive policy changes has contributed to U.S. cryptocurrency adoption plummeting from 17% during the initial ETF approval phase in early 2025 to just 12% currently, according to market surveys. This erosion of trust underscores how political promises mean little without congressional action to secure American investors’ rights and clear regulatory pathways.

Macroeconomic Storm and Geopolitical Risks Reinforce Bearish Sentiment

Bitcoin’s decline unfolds against a backdrop of cooling U.S. labor markets, inflation stubbornly above the Federal Reserve’s 2% target, and escalating trade tensions through tariffs on Canada, the European Union, and South Korea. Geopolitical flashpoints including the Ukraine conflict, Iran tensions, and uncertainty around Venezuela and Greenland further amplify risk-off investor sentiment. MIT researcher Christian Catalini explained that these macro and geopolitical pressures make investors “risk-averse,” while Morningstar’s Bryan Armour described a “snowballing” effect where declining prices trigger more selling. The Crypto Fear & Greed Index plunged near 15, indicating “extreme fear,” as Bitcoin decoupled from equities and underperformed gold, destroying the “digital gold” narrative that once attracted conservative investors seeking inflation hedges.

Post-Cycle Digestion Phase Mirrors Previous Bear Markets

Bitcoin’s four consecutive months of decline through 2025 marked its longest losing streak since the pandemic era, resembling post-euphoria digestion phases that followed the 2017 and 2021 peaks. Market analyst Kyle Rodda noted that deleveraging pressures from gold and silver sell-offs spilled over into Bitcoin, forcing liquidations as traders unwound positions across correlated assets. While Bitcoin remains approximately 370% above its early 2023 levels, technical analysts point to similarities with the 2018-2019 period when constrained upside persisted until monetary policy eased and liquidity reset. The current environment of tightening conditions under Warsh’s anticipated Fed leadership suggests this digestion phase could extend further, testing the resolve of investors who bought into Trump’s crypto vision without considering how his own appointments might undermine it.