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

Why has Bitcoin, despite numerous positive developments related to Trump in the cryptocurrency market, failed to meet expectations?
As 2025 approaches, the optimistic sentiment that prevailed at the beginning of the year in crypto markets has largely dissipated.

Especially, the “Trump rally,” supported by Donald Trump’s positive statements about cryptocurrencies, could not prevent the sharp pullback in recent months. While the digital asset market experienced a loss of approximately $1 trillion in the last quarter of the year, gains within the year were also largely erased.

In October, Bitcoin reached an all-time high of $126,000 on October 6, creating strong optimism in the market. However, this rise was short-lived. Trump’s announcement of 100% tariffs on China on October 12 disrupted risk perception in global markets, and within 24 hours, $19 billion worth of positions were liquidated in the crypto market. This was recorded as the largest wave of liquidations to date.

According to Rachael Lucas, Marketing and Communications Director at BTC Markets, Australia’s largest crypto exchange, cryptocurrencies are extremely sensitive to narratives and global market confidence. Lucas stated that crypto assets are categorized as “risky” and tend to perform better when investors are confident about the economic outlook.
Lucas said, “The Trump administration may be favorable towards crypto, but tariffs and tight monetary policy overshadow this positive sentiment”:

“This situation reminds crypto investors that macroeconomic factors are more decisive than political stances.”

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

Christian Catalini, founder of MIT Cryptoeconomics Lab, argues that the current decline is not just a change in sentiment. According to Catalini, the market crash results from the convergence of three main structural factors: the $19 billion leverage cleanup in October, risk aversion triggered by US–China trade tensions, and the potential unraveling of crypto holdings in corporate balance sheets.

Lucas also mentioned that one of the factors shaking the crypto market could be the pullback in AI stocks like Nvidia. She noted that some Bitcoin miners have shifted 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 she is not worried about a long-term crypto winter. “We are technically in a bear market,” Lucas said, “but despite all these macro pressures, Bitcoin trading above $80,000 indicates that the market is far from completely collapsing.”