Is The 2025 Cryptocurrency Bull Market Over Already?

The cryptocurrency market was supposed to be going from strength to strength in Q1 2025, buoyed by Bitcoin’s natural halving cycle and the long-awaited arrival of a pro-crypto President in Donald Trump. Instead, the industry has declined steadily as investors become wary of macroeconomic constraints and scams.

Trump’s resounding election victory had emboldened crypto enthusiasts. There were also some early movements since the President re-entered the White House which indicated that their ambitions for the industry could finally be realized.

The repeal of an accounting rule by the US Securities and Exchange Commission and an executive order by Trump focusing on directing a working group to study and propose changes to crypto regulations along with the possible formation of a strategic government reserve of cryptocurrencies within 180 days would be music to the ears of investors.

Upon Trump’s victory on November 5, 2024, the total global cryptocurrency market capitalization rallied from $2.26 trillion on election night to a peak of $3.72 trillion by December 17. However, just two months on, we’ve seen the total crypto market cap recede below $3.2 trillion in an unexpected contraction.

Despite the President’s crypto-friendly outlook, it’s possible that the early days of Trump 2.0 are playing a role in undermining the wider cryptocurrency ecosystem at a time when Bitcoin’s stock-to-flow (S2F) model has forecasted a post-halving bull run.

“There are concerns about how Trump's policies could affect cryptocurrency markets in the long term,” suggests Maxim Manturov, head of investment research at Freedom24. “His administration's approach to taxation and regulation could introduce uncertainty that could scare off some investors.”

“In addition, any significant market corrections or increased volatility could lead to a reassessment of risk among cryptocurrency investors. Therefore, while the near-term outlook may remain positive, the sustainability of this bullish trend will depend on specific regulatory changes, Fed policy, and broader economic conditions.”

Presidential Memecoins Undermine Trust

One of the more unexpected trends of crypto in 2025 so far has revolved around the launch of memecoins backed by multiple Presidential figures. In Argentina, President Javier Milei has risked impeachment by backing the launch of the $LIBRA coin.

Following a post in support of $LIBRA on social media platform X, the coin rallied in value before Milei decided to delete the post causing a collapse that saw many lose out on their investment.

But it was the launch of $TRUMP that caused the biggest stir in the crypto memecoin space in 2025. The official Presidential token, which was soon followed by the launch of $MELANIA, the official token of the First Lady, drew accusations of a cash grab, due to the President’s team controlling at least 80% of $TRUMP’s supply.

At the time of writing, $TRUMP has sunk 77% from its peak value, while $MELANIA is more than 90% below its all-time high.

The Trump administration has denied any wrongdoing with the launch of official Presidential memecoins, and maintains that purchasing the token is merely a show of support to the President and First Lady, rather than an investment opportunity.

Recently, it was announced that anybody who bought official Trump products before February 15, 2025, would be able to claim three free $TRUMP tokens, opening the door to a prospective loyalty scheme associated with the coin.

However, it’s been the proliferation of memecoins that has risked undermining the wider crypto landscape’s momentum in recent weeks. The launch of $TRUMP prompted an estimated 700 copycat tokens posing as the official memecoin, damaging trust in the ecosystem in the process.

Following the high-profile collapse of the $HAWK memecoin promoted by influencer Haliey Welch in December, crypto pump-and-dump schemes have been a key concern for investors, and there’s a danger that meme investing is damaging the liquidity of the market in its entirety.

Worryingly, the value of Bitcoin, the world’s most dominant cryptocurrency has slid more than 8% back below $100,000 in the wake of Trump’s inauguration. But there have been many different factors at play in driving the price of BTC lower.

Macroeconomics Push Bitcoin Lower

There have been many reasons behind Bitcoin’s poor performance during the early stages of Trump 2.0.

One major factor has stemmed from Wall Street jitters over DeepSeek, the generative AI platform that overtook ChatGPT as the most downloaded app.

With the Chinese firm illustrating that the AI boom isn’t isolated to Wall Street, markets became fearful of overvaluations domestically.

Because the cryptocurrency market correlates with Wall Street, the market became more volatile as a result.

Trump’s tariffs have also contributed to more volatility throughout the cryptocurrency landscape, with many global risk assets impacted by the uncertainty brought by the impact on trade.

It may be that the impact of these macroeconomic pressures is pushing crypto lower in the short term, but could help Bitcoin to return to its cyclical rally in the months ahead.

Could Skies be Set to Clear?

Despite the impact of $TRUMP on the cryptocurrency landscape becoming the subject of much debate, the Trump administration continues to explore new projects within the ecosystem.

The recent announcement by the Trump-backed venture World Liberty Financial that it would launch a strategic token reserve designed to boost the crypto market, with a focus on Bitcoin and Ethereum, has been a timely piece of good news to provide a boost to investors.

Dubbed the ‘Macro Strategy’, the initiative could lead to a reserve that maintains a focus on decentralized finance (DeFi) as a means of improving the quality of financial services offered throughout the fintech market.

Another source of optimism stems from the announcement of the ‘DOGE Dividend’, which the head of the Department of Government Efficiency, Elon Musk, suggested could come in the form of a $5,000 cheque sent to US taxpayers using the savings made by his department in 2026.

This payout could provide a widespread cryptocurrency market boost akin to the rollout of government stimulus packages amid the COVID-19 pandemic.

Is This The End of Bitcoin’s Cycles?

The cryptocurrency landscape has historically relied on Bitcoin’s halving cycle to chart out the coin’s market rallies. As the only metric that produced a consistent trend in a market that’s filled with volatility, Bitcoin’s cycles have been an excellent investment tool.

However, the return of Donald Trump has seen an unprecedented level of attention fall on a wide range of cryptocurrencies. As a result, we’re seeing investor sentiment driven by many factors that fall outside of Bitcoin’s cycles.

If Trump can continue to propel crypto further into the limelight then it’s likely to be bullish for the industry as a whole. But without the reliability of Bitcoin’s cycles, investors may need to find new ways to map out future bull runs.