Bitcoin in free fall, not bit-by-bit
In the recent past, Bitcoin, which began another rousing rise between April and September 2025, thanks to the backing of Donald Trump, the US president, slumped to a ridiculously-low level. In October 2025, at its height, it was priced over $1,25,000. This week, it was down to $60,000, “lower than what it was when Trump got reelected.” As a media report states in an incredulous fashion, “It was not supposed to go this way.” The president vowed to make the US the crypto capital of the world, appointed crypto-friendly regulators, and pushed the Congress to pass legislation that favoured the sector.
Investors are stunned because things seem to be going Trump’s way. The economy is strong, the dollar has not slumped, stock markets have rebounded, inflation is not out of hand, investments are flowing, trade deals (including the one with India) will boost exports, and the local job market seems intact. Yet, for the crypto, there seems to be some invisible cryptic script that is being written for we-do-not-know-who. It is as if the gung-ho Bitcoin, which went up early last year with each passing day, has suddenly decided that enough is enough, the president’s claims are not enough to walk the talk.
Crypto critics like Ben Schiffrin grin, and contend, “I told you so.” Adds Schiffrin, “Bitcoin is anything but safe. It is the most speculative asset, and I think people are realising that that is the case.” Indeed, speculation seems to be a consensual reason for the free fall this time. Initially, Trump’s reelection, and the ensuing enthusiasm, created a buying mania. Of course, this was coupled with hoopla, and resulting speculation. Everyone got into the game, and many borrowed excessively, and recklessly to buy Bitcoins, and other cryptos. Well, if the president backed them, who could stop their rise and rise.
“All that borrowing juiced profits when Bitcoin and other cryptos were surging. But as soon as the value of Bitcoin started falling, the reverse happened, and it magnified the losses,” explains a media report. This seems to be an explanation in retrospect. Possibly, the borrowing steam ended with a rise in interest rates. Probably, the short-sellers overwhelmed the buyers. Maybe, the market was spooked, especially when Trump announced an additional 100 per cent tariff on Chinese goods in October 2025, even though an interim one-year pact was inked the next month. It is likely that profit-taking and greed took over.
Whatever the reason, or combination of them, there was a crypto contagion due to the volatility. It caught on, and spread exponentially. Even the most ardent buyers turned sellers, and the sellers sold more. It was yet another lesson that no one has imbibed for centuries. What goes up fast, comes down faster, sooner than later. Once the Bitcoin was on a downward curve, there was no stopping, the same way it seemed when it was on the way up. This is the nature of a speculative asset that is not backed by macros or fundamentals, but sentiments.
One should have known the result. For, this is not the first time that Bitcoin and cryptos have soared and roared, and then whined and whimpered within a few months or a couple of years. In the post-pandemic period, Bitcoin dropped by almost half between March and June 2021. It was down to less than a third of its value between November 2021 (when it regained its earlier losses) and June 2022. In April-September 2024, Bitcoin lost more than a fifth of its value. “The latest crash is a reminder of the… cycle that has afflicted the sector throughout its short history,” states a media report.
“The crypto industry, for example, entered 2022 brimming with hope, as the pandemic helped spark a surge in trading from people stuck at home, leading to a frenzy that boosted all kinds of speculative investments, from cryptocurrencies to digital tokens called NIFTs. But then a series of events, including rate hikes by the Federal reserve, ushered in a period of intense volatility that eventually led to the collapse of crypto exchange FTX, which in turn sparked a severe downturn, or ‘winter,’ in crypto parlance. In 2022, the value of Bitcoin fell from about $50,000 a coin to under $20,000,” states a report.
Similarly, towards the end of 2017, the markets were excited by IPO-like (Initial Public Offering) issues related to crypto coin offerings. Cryptos were sold by firms, like others sold shares. Of course, there were huge queues to gobble them up, which led to all kinds of gains, and the mania spread to the entire sector. The CPOs (Crypto Public Offerings) peaked in January 2018, and fizzled out. The sizzling prices of cryptos bubbled, crackled, hissed, and cracked. It was the end of yet another short bitter-sweet story that helped some investors, and forced others to lose their shirts and trousers, and other clothes.
Going by past experiences, it is a matter of time, although we are not sure when, why, and how, before Bitcoin and cryptos rise from the ashes, like a never-dying Phoenix, and reach jittering heights. Anything can trigger a comeback out of nowhere. It can be something that Paul Atkins, Trump’s handpicked consultant to head the Securities and Exchange Commission, says or does. It can be a passage of a bill backed by crypto-friendly legislators to decide who will regulate the currencies. In the 2024 elections, the crypto industry spent hundreds of millions of dollars to back loyal and supportive senators and Congresspersons. It can be a new crypto venture started by Trump’s family.
Maybe the trigger will not be economic, regulatory, legal, or speculative. It may come in the form of politics, after the midterm elections later this year. If Trump and the Republicans capture the Senate and Congress, the cryptos, along with other pro-Trump assets, may be back with a bang. Even if nothing happens in real terms, the sentiments will be enough to make the virtual currencies fly to dizzy levels. The fact remains that Bitcoin is never in an uncertain plateau zone. It is either down in the dumps, where no one notices its existence, or up on the Rockies, where no one can see what is happening to it. There is no middle ground for the cryptos. They either attract the unquestioned passions of the investors, or absolute and unconditional hatred.
