‘Crypto Winter’: Why Is Bitcoin Crashing Despite Trump’s Support?
By Priyanka Shankar | Published on 6 February 2026 | Al Jazeera
Bitcoin, the world’s most popular cryptocurrency, has been plummeting since late last year, hitting its lowest levels in over a year despite the renewed political backing it has received under US President Donald Trump’s administration. This downturn reflects a broader phase often referred to as a “crypto winter,” a period marked by declining or stagnant cryptocurrency prices. Here’s an in-depth look at why Bitcoin is crashing and what the future might hold.
Bitcoin’s Recent Decline: Key Figures and Trends
Bitcoin’s value, which soared to an all-time high of more than $127,000 in October 2025, has since fallen sharply. By December, it had slipped to around $90,000, and by the last weekend of January 2026, it dipped below $80,000. Most recently, on Thursday afternoon, Bitcoin’s price dropped below $66,000 and was noted to hover near $62,900 on Friday morning.
Since the start of this year alone, Bitcoin has plunged by about 30 percent. Other major cryptocurrencies, such as Ether—the second-largest digital asset—have also experienced significant losses, with Ether dropping 19 percent in the past week to about $1,854 per coin.
What’s Causing Bitcoin’s Price to Fall?
Experts point to several interconnected factors behind the current “crypto winter”:
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Broader Market Volatility: Turmoil across global financial markets, including significant sell-offs in stocks, has spooked investors. Fluctuations in the prices of precious metals like gold and silver have further dampened market sentiment. For instance, gold and silver prices oscillated dramatically over recent weeks, affecting investors’ appetite for alternative assets like cryptocurrencies.
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Decline in Institutional Demand: According to CryptoQuant, an analytics group monitoring investment trends, major U.S. exchange-traded funds (ETFs) that had aggressively bought Bitcoin throughout 2025 are now offloading their holdings. Deutsche Bank analysts reported that these ETFs have seen net outflows totaling billions of dollars monthly since the downturn began in October.
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Reduced Market Liquidity and Trading Volumes: Adam Morgan McCarthy from Kaiko, a crypto market data provider, explained that diminished hype and lower trading volumes reduce liquidity in crypto markets. This lack of liquidity amplifies price movements, often exacerbating downward trends during bear markets, creating a vicious cycle where fewer trades make the assets less attractive.
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Macroeconomic Concerns and Regulatory Sentiment: The crypto market is sensitive to changes in macroeconomic policies and regulatory environments. The appointment of Kevin Warsh as the new Chair of the Federal Reserve, coupled with the decision to keep interest rates steady rather than reducing them, signaled a policy shift that accelerated the price decline.
Trump’s Crypto-Friendly Policies: Why Haven’t They Helped?
Despite Bitcoin’s recent struggles, its price initially surged following Donald Trump’s return to the presidency in 2024 amid expectations he would foster a more welcoming atmosphere for cryptocurrencies.
During his pre-election campaign, Trump hailed the United States as the “crypto capital of the planet” and promised to establish a national Bitcoin “strategic reserve.” Upon taking office in March 2025, he launched plans to create a crypto reserve including Bitcoin, Ether, XRP, Cardano, and Solana.
Additionally, his administration introduced the GENIUS Act, designed to regulate and protect consumers in the stablecoin market, and recently proposed draft legislation to clarify regulatory oversight over the crypto industry.
Trump’s personal involvement in the crypto arena — his family owns World Liberty Financial (WLFI), which launched the USD1 stablecoin pegged to the US dollar — has kept cryptocurrency in the political spotlight. Nevertheless, external economic factors and global market volatility have overpowered these policy supports, preventing them from stabilizing Bitcoin’s price.
A History of Crypto Winters
Bitcoin and other cryptocurrencies have previously endured similar periods of downturn called “crypto winters.”
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The first major crypto winter followed Bitcoin’s 2017 peak, with prices tumbling in 2018 amid global regulatory crackdowns.
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Another significant downturn occurred in late 2022 after the collapse of crypto exchange FTX, which filed for bankruptcy amid a liquidity crisis that shook industry confidence worldwide.
What Lies Ahead for Bitcoin and Crypto Markets?
While the current crypto winter is painful for investors, experts emphasize it is not unprecedented nor insurmountable. Pat Hougan, a veteran market analyst, suggests typical crypto winters last about 13 months and noted the cycle of despair and pessimism commonly seen at such times.
“In every instance, crypto has bounced back,” Hougan remarked. “There is nothing fundamentally changed about crypto during this market pullback. Since this winter began in January 2025, we can expect spring — a robust recovery — to come soon.”
As Bitcoin and the broader cryptocurrency market navigate this challenging phase, investors and regulators alike watch closely, balancing optimism for crypto’s long-term potential with the realities of a shifting economic and political landscape.
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For ongoing updates about the cryptocurrency market and expert analyses, stay tuned to Al Jazeera Crypto News.