Despite All The Positive Developments, Why Has the Expected “Trump Rally” in Bitcoin Not Happened This Year?

As 2025 draws to a close, the optimistic sentiment that prevailed in the cryptocurrency markets at the beginning of the year has largely dissipated.

The “Trump rally,” particularly fueled by Donald Trump’s positive rhetoric towards cryptocurrencies, has failed to prevent the sharp pullback in recent months. The digital asset market experienced a loss of approximately $1 trillion in value during the last quarter of the year, largely wiping out all previous year’s gains.

In October, Bitcoin reached an all-time high of $126,000 on October 6th, generating strong optimism in the market. However, this rise was short-lived. Trump’s announcement of 100% tariffs on China on October 12th disrupted risk perception in global markets, resulting in a $19 billion liquidation in the cryptocurrency market within 24 hours. This was recorded as the largest liquidation wave to date.

According to Rachael Lucas, marketing and communications director at BTC Markets, one of Australia’s largest cryptocurrency exchanges, cryptocurrencies are highly sensitive to narratives and global market confidence. Lucas stated that crypto assets fall into the “risky” category and perform better during periods when investors are confident about the economic outlook.

Lucas said, “The Trump administration may be welcoming to crypto, but tariffs and tight monetary policy are overshadowing that positive sentiment.”

“This situation serves as a reminder to crypto investors that macroeconomic factors are more decisive than political stances.”

Some experts are concerned that the sector may be entering a new crypto winter, characterized by prolonged stagnation or losses. The last crypto winter lasted from late 2021 to 2023; during this period, FTX founder Sam Bankman-Fried was tried and convicted, and Bitcoin lost approximately 70% of its value.

Christian Catalini, founder of the MIT Cryptoeconomics Lab, argues that the current decline is not simply a shift in sentiment. According to Catalini, the market crash stems from a convergence of three fundamental structural factors: the $19 billion leverage cleanup in October, risk aversion triggered by US-China trade tensions, and the potential unraveling of the strategy of holding cryptocurrencies on corporate balance sheets.

Lucas stated that one of the factors shaking the crypto market could be the pullback in AI stocks like Nvidia. He noted that some Bitcoin miners are redirecting their energy infrastructure to data centers and AI applications, and therefore, the negative sentiment in the AI sector is also reflected in crypto.

Despite all these developments, Lucas stated that the current decline is consistent with Bitcoin’s historical four-year cycles and that he is not concerned about a prolonged crypto winter. “Technically, we are in a bear market,” Lucas said, “but the fact that Bitcoin can remain priced above $80,000 despite all these macroeconomic pressures shows that the market is far from completely collapsing.”