‘Crypto winter’: Why is Bitcoin crashing despite Trump’s support? | Crypto News

Crypto markets came under pressure this week as the price of the world’s most popular cryptocurrency, Bitcoin, tumbled to its lowest level in more than a year.

On Thursday afternoon, the price of Bitcoin fell below $66,000 and was hovering around $62,900 on Friday morning.

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The decline in the price of the digital asset kicked off in the last weekend of January, when it fell below $80,000.

In October of last year, Bitcoin peaked at over $127,000 before falling back to around $90,000 in December.

After its latest tumble, Bitcoin is currently down about 30 percent more since the beginning of the year.

Here’s what we know about what’s going on in the world of cryptocurrency:

Why is the price of Bitcoin falling?

Volatility in other markets is one of the main drivers.

Analysts say a sell-off in global stocks amid geopolitical uncertainty and recent volatility in the price of gold and silver is part of the reason for the drastic drop in the price of Bitcoin.

“Institutional demand has substantially reversed,” CryptoQuant, an organization that provides analysis of global markets to cryptocurrency investors, wrote in a report on Wednesday.

The report noted that U.S. exchange-traded funds (ETFs) — a form of pooled investment — that bought up Bitcoin last year are selling it this year.

Analysts at Deutsche Bank wrote in a note to clients this week that these ETFs “have seen billions of dollars in outflows every month since the downturn in October 2025,” referring to investors in the funds that pay them out.

Furthermore, they added that specialized US spot Bitcoin ETFs suffered outflows of more than $3 billion in January this year, following outflows of about $7 billion and $2 billion in November and December 2025, respectively.

“This steady sell-off in our view indicates that traditional investors are losing interest, and overall pessimism about crypto is growing,” the analysts said.

Adam Morgan McCarthy, product specialist at Kaiko, an organization that provides crypto market data and analytics, told Al Jazeera: “The fall in Bitcoin prices is largely linked to less interest in the markets and lower trading volumes. This leads to less liquidity, so any move higher or lower is exacerbated.”

He explained that the crypto market relies heavily on “hype-driven” cycles where people buy because of a fear of “missing” an opportunity.

“This hype forms the foundation of trading volumes, and that’s what we mean by liquidity. Essentially, more trading volumes means more liquidity, as it makes it easier to buy and sell Bitcoin quickly,” he said.

“Right now that foundation is disappearing and that tends to happen during bear markets or ‘crypto winters,’ which makes it much harder to effectively trade assets, and then they become even less attractive. So it’s quite a vicious cycle that leads to these downward spirals,” he added.

A “crypto winter” is a long period of falling or stagnant prices, something that can be driven by, among other things, worsening macroeconomic conditions or tightening of market regulations.

Volatility in gold and silver prices over the past two weeks has also dampened market sentiment, affecting the price of cryptocurrencies. Analysts say geopolitical instability and the prospect of a rising US dollar led investors to sell precious metals, leading to the sudden downturn.

Then, last week, prices rebounded sharply, with the price of gold reaching a record high of nearly $5,595 an ounce, while silver hit a high of nearly $122.

But this high was short-lived, and this week the prices of these precious commodities fell – again – with gold falling to $4,872.83 an ounce on Thursday and silver falling to $77.36 an ounce.

Other cryptocurrencies such as Ether, the second largest cryptocurrency, also fell. The price of Ether has fallen 19 percent this week, closing at $1,854 late Thursday.

Does this mean that ‘crypto-friendly’ policies in the US don’t work?

The price of Bitcoin soared following US President Donald Trump’s return to the White House last year, with analysts expecting him to adopt a “crypto-friendly” regulatory regime.

At a Bitcoin conference in July 2024, as part of his pre-election rally, Trump said the US is the “crypto capital of the planet” and promised to also create a Bitcoin “strategic reserve” if he becomes president.

In March 2025, upon taking office, Trump announced that his government would create a national strategic crypto reserve that would include five cryptocurrencies – Bitcoin and Ether as well as smaller currencies XRP, Cardano and Solana.

In July of last year, Trump also announced the GENIUS Act, a new cryptocurrency legislation that would introduce regulations and consumer protections for “stablecoin,” a type of cryptocurrency whose value is tied to a fixed currency or commodity.

Then, last month, the US also unveiled draft legislation that would create a regulatory framework for cryptocurrencies, which, if signed into law, would clarify financial regulators’ jurisdiction over the cryptocurrency sector.

The US president has a personal interest as his family owns the crypto firm World Liberty Financial (WLFI).

Last March, WLFI launched its own “stablecoin” – a dollar-pegged cryptocurrency backed by US Treasuries – called USD1.

But the president’s personal interest in cryptocurrencies and supportive policies have not protected the digital asset from external market factors.

Have we seen ‘crypto winters’ before?

Yes.

A crypto winter was unleashed after Bitcoin peaked in December 2017 and then tumbled in December 2018 due to intense regulatory crackdowns in the US, Canada and other countries, among others.

Another such winter occurred in November 2022 after a peak in October 2021, due to the FTX currency scandal. In November of that year, crypto exchange FTX began US bankruptcy proceedings after a liquidity crisis prompted intervention from regulators around the world.

In a Thursday briefing note, analysts at Kaiko said the downward trend in prices “really accelerated” after Trump appointed Kevin Warsh as the new Federal Reserve chairman.

Warsh will replace Jeremy Powell, who has criticized Trump for not cutting interest rates.

The Kaiko briefing note said: “Powell’s recent announcement on January 28 that interest rates will remain unchanged, combined with the appointment of the new chairman, was a real turning point, acting as a catalyst for a sharp acceleration of the decline. The reaction was all the more pronounced, as the macroeconomic regime changes were already sensitive, especially in the crypto-economic market. The report said.

What will happen next?

Hougan noted that crypto winters typically last about 13 months and assured investors that the current “winter” will not last long.

“As a veteran of multiple crypto winters, I can tell you that the end of those crypto winters feels a lot like now: Despair, desperation and malaise. But there is nothing about the current market pullback that has changed anything fundamental about crypto,” he said in his report.

“I think we’re going to come back sooner rather than later. Heck, it’s been winter since January 2025. Spring is sure to come soon,” he added.