Why the 'Trump Bet' Couldn't Lift Crypto Markets Off the Ground—What Really Drove This Year's Reversal

When Bitcoin surged to an all-time high of $126,000 back in October, many market participants believed the “Trump administration effect” would sustain a bull run through year-end. The reality tells a different story. As we head into 2026, the cryptocurrency sector has surrendered virtually all its annual gains, with digital assets shedding roughly $1 trillion in value since that October peak.

The October Collapse: When Politics Met Macroeconomics

The turning point arrived mid-October when escalating tariff rhetoric sent shockwaves through markets. Within a single day, crypto exchanges recorded $19 billion in liquidations—a record-breaking figure that exposed the fragility beneath the surface. Ethereum bore the brunt, declining 40% over the subsequent weeks. Even digital assets tied to prominent political figures faced pressure, with one such crypto venture shrinking considerably by year-end.

The conventional wisdom suggested that a pro-crypto administration would provide uninterrupted tailwinds. Instead, external pressures proved overwhelming: escalating trade tensions, a contracting macroeconomic backdrop, and forced deleveraging wiped out gains across the board. Bitcoin hit lows near $81,000 in November—its worst monthly performance since 2021. Today, BTC hovers around $91,170, down 7.13% year-to-date.

The Debate: Correction or Crypto Winter?

Industry observers remain split. Some warn that markets are entering a prolonged “crypto winter” cycle. Others, including BlackRock CEO Lawrence Fink and Coinbase chief Brian Armstrong, take a longer view. Both executives have publicly emphasized that institutional capital continues flowing into digital assets, suggesting a multi-year structural shift from niche to mainstream acceptance.

Ethereum has gained 3.11% over the past month, hinting that accumulation phases may already be underway. The broader narrative—despite near-term turbulence—points toward crypto’s institutional evolution rather than existential decline. The “Trump Market” failed as a catalyst for sustained upside, but the deeper story of digital asset adoption remains on track.