The Trump Trap: Why Bitcoin is Falling Where it Once Soared to $20,000 in 2016

[Alpen]

The weekly Bitcoin chart shows that the cryptocurrency's price has approached the growth zone of the first 'post-election' candle, which occurred when the crypto market celebrated Donald Trump's victory. The US president based his election campaign on the promise of legalising digital currencies and establishing a crypto reserve, and appointed the most crypto-friendly administration to achieve this.



Bitcoin responded to these initiatives with vigorous growth, but the sell-off began immediately after the inauguration. A second attempt at growth led to a new historic high, but this ended in protracted sideways movement, raising the risk of a repeat of the crypto winter scenario.

But why is the cryptocurrency market reacting so differently to events in 2016, when Trump's election saw BTC trading at less than $1,000, and by the end of 2017 the price had reached $20,000?

During that period, low inflation and soft monetary policy contributed to liquidity growth, and Bitcoin's modest capitalisation allowed speculative capital to create a powerful upward trend.

At that time, Trump gave the market the opportunity to avoid paying taxes by exchanging cryptocurrency for USDT, thus ushering in the era of stablecoins. In his new presidential term, however, he is exploiting cryptocurrencies for the personal enrichment of his family.

Additionally, global financial conditions remain tight following a prolonged period of high interest rates, and the market's increased size has significantly reduced its price sensitivity to political triggers alone.

Analysis of SOPR indicators shows that long-term investors are starting to behave like speculators by locking in minimal profits. Short-term holders often trade at a loss.



Steady inflows into spot Bitcoin ETFs are needed to break out of the sideways trend. If institutional investors do not resume actively buying BTC, the market will descend into a crypto winter.

[EarnOnVictor]

But why is the cryptocurrency market reacting so differently to events in 2016, when Trump's election saw BTC trading at less than $1,000, and by the end of 2017 the price had reached $20,000?

At that time, Trump gave the market the opportunity to avoid paying taxes by exchanging cryptocurrency for USDT, thus ushering in the era of stablecoins. In his new presidential term, however, he is exploiting cryptocurrencies for the personal enrichment of his family.

I could see you referenced Trump so much in this article, but it's more than you should, TBH. People often neglect the tradition, psychology and dynamics of Bitcoin to start praising a public figure like Trump. During Trump's presidency, he didn't care about Bitcoin, but the Bitcoin community and its tradition made it valuable. This time too, he is a fake bitcoiner (take it or leave it), he's just a politician/businessman who saw crypto as an opportunity to gain more popularity and also enrich his family by selling cryptocurrency and creating their own tokens. All these were carefully planned, and it worked.

I will always maintain that the Bitcoin community is key, and not any public figure.

[Don Pedro Dinero]

Analysis of SOPR indicators shows that long-term investors are starting to behave like speculators by locking in minimal profits. Short-term holders often trade at a loss.

It's something I've been noticing lately, that there has been a change in that regard. People believed that once prices reached these levels, they would continue to rise sky-high, but it seems that many large holders have taken advantage of the situation to sell, play with options, or even bet on short positions.  It's clear that with so many big players involved, the price may be subject to more manipulation that in a market dominated by retail, where there are periods of great euphoria or great FOMO, with little flat movement like we are seeing this year.

[ColdLava40]

the price may be subject to more manipulation that in a market dominated by retail, where there are periods of great euphoria or great FOMO, with little flat movement like we are seeing this year.

November revealed a lot about the current state of the market, and it’s hard to say where we are headed next. Most of the major players have stayed quiet since the November crash, which felt more like market manipulation than a typical end ofcycle retracement.

Because of this, retail investors are on high alert, ready to sell at a moment's notice. While Bitcoin has stabilized recently, the volatility is still crazy. I think this pause is just giving small investors a chance to relax before the downward trend continues..

At that time, Trump gave the market the opportunity to avoid paying taxes by exchanging cryptocurrency for USDT, thus ushering in the era of stablecoins. In his new presidential term, however, he is exploiting cryptocurrencies for the personal enrichment of his family.

He did what he had to do, that's politics.what did we all expect? Trumps dedication to crypto is for his own benefits. He simply saw an opportunity through bitcoin and took it.

[Zaguru12]

This fear was raised when institutions were actually flooding into bitcoin after the ETF approval, many feared then that this institutions would actually be using their funds to try and manipulate the market. I think they have tried that where we see many treating bitcoin more like a trading tool than the usual buy and hold we use to have. Historically the past trend seems to be broken, while I still hold on to the historical trend I think we will still be in this boat as long as investors pay more attention to political issues and related it more to bitcoin. Easy for me to say Trump has been more of a disaster to bitcoin than anything he could have been

[Alpen]

I will always maintain that the Bitcoin community is key, and not any public figure.

Donald Trump simply blazed a trail for politicians to monetize their influence in exchange for crypto support. The President of Argentina is already following suit. In El Salvador, something questionable is also happening where Bitcoin meets state power. You could even add Nepal and Venezuela to this list. Cryptocurrency is becoming a cash cow for dishonest rulers and a new kind of legally sanctioned Ponzi scheme for corporations—take MicroStrategy’s strategy of buying BTC with borrowed funds, for example

He did what he had to do, that's politics.what did we all expect? Trumps dedication to crypto is for his own benefits. He simply saw an opportunity through bitcoin and took it.

A 'for-sale' president is the ultimate disaster for any nation. His greed likely won't be limited to the crypto market. What’s to stop him from selling out the country’s interests for his family's bottom line?

Besides, Trump has achieved nothing for crypto's growth. The numbers speak for themselves: Bitcoin's negative performance this year is all the evidence we need. Price action tells the whole story

[asriloni]

Steady inflows into spot Bitcoin ETFs are needed to break out of the sideways trend. If institutional investors do not resume actively buying BTC, the market will descend into a crypto winter.

It means we're finally coming to the era where market is depending on the institution. It sounds the pathetic caused by i was expecting organic growth of Bitcoin. However. it's gonna be fully tied to the institution who pump and dump. the fact that this time institutional is doing the opposite thing like blackrock who is keep offloading their Bitcoin.

This can be a signal if we're heading toward the winter season. You know gold, Silver, and even SP500 keep record new ATH while BTC is just dumping even more. It sounds weird, but that's the reality. We're coming to the market that is fully manipulated.

[Frankolala]

This fear was raised when institutions were actually flooding into bitcoin after the ETF approval, many feared then that this institutions would actually be using their funds to try and manipulate the market. I think they have tried that where we see many treating bitcoin more like a trading tool than the usual buy and hold we use to have. Historically the past trend seems to be broken, while I still hold on to the historical trend I think we will still be in this boat as long as investors pay more attention to political issues and related it more to bitcoin. Easy for me to say Trump has been more of a disaster to bitcoin than anything he could have been

I wouldn't blame Trump for his selfish moves and decisions that affected the cryptospace instead, I will blame those who invested or got into bitcoin because of all the empty promises made by Trump if he wins the election. He won it and many investors increased their stash or got into bitcoin. It's these same investors that are panicking and selling whenever, Trump sneeze. Don't invest because of what people say but invest because bitcoin is the new generational wealth.

[macson]

I wouldn't blame Trump for his selfish moves and decisions that affected the cryptospace instead, I will blame those who invested or got into bitcoin because of all the empty promises made by Trump if he wins the election. He won it and many investors increased their stash or got into bitcoin. It's these same investors that are panicking and selling whenever, Trump sneeze. Don't invest because of what people say but invest because bitcoin is the new generational wealth.

People's mistake is to believe too much in what Trump says without first doing research on the risks and their readiness to invest in bitcoin. When the market changes direction, they are confused and make wrong decisions because they do not have a deep understanding of Bitcoin and proper financial management to deal with market situations that change so quickly. As a result of this, they sold their bitcoins to avoid worsening loss conditions, even though that was the wrong decision because it would make their losses permanent.

[ultrloa]

This fear was raised when institutions were actually flooding into bitcoin after the ETF approval, many feared then that this institutions would actually be using their funds to try and manipulate the market. I think they have tried that where we see many treating bitcoin more like a trading tool than the usual buy and hold we use to have. Historically the past trend seems to be broken, while I still hold on to the historical trend I think we will still be in this boat as long as investors pay more attention to political issues and related it more to bitcoin. Easy for me to say Trump has been more of a disaster to bitcoin than anything he could have been

I wouldn't blame Trump for his selfish moves and decisions that affected the cryptospace instead, I will blame those who invested or got into bitcoin because of all the empty promises made by Trump if he wins the election. He won it and many investors increased their stash or got into bitcoin. It's these same investors that are panicking and selling whenever, Trump sneeze. Don't invest because of what people say but invest because bitcoin is the new generational wealth.

I think the only problem done by investor is they keep listening to those politician and think that all the words coming out in their mouth is true.

But actually we cannot totally blame them since maybe some of those people are looking forward for something innovative changes that might going to happen when those powerful leader support Bitcoin.

We see some movement happen when Trump made a great statement about Bitcoin and its just there are people didn't expect that they are just been manipulated and been used for personal gains of those leaders like Trump.

So maybe they should learn from those past incident or situations happen so that they will not became so gullible and can able to think about what possible effect of those actions they have done. Better for people to learn and don't repeat to be one of easy target of their manipulative actions.

[coinrifft]

The growth is fueled by retail investors in 2017's bull run as far as I know. It's not that there are a lot of institutions or even whales like Michael Saylor who are in the market already. It's mostly average joe investors who started their journey in Bitcoin market. And it's also the boom of altcoins or ICO projects, that those who might have profited shifted to Bitcoin to make more profits. So we can't really compare that era or Trump 1.0 vs Trump 2.0 as the market is very different right now. A lot of big players and entities are now inside because of ETF's. And it's falling not because of Trump, it's the nature of Bitcoin. As much as others say that they don't believed in a 4 year cycle anymore, still, as of this time, that cycle holds so with that, next year, the bears are going to take over and the price is going to decline and we can't go and blame that to Trump.

[hyudien]

It means we're finally coming to the era where market is depending on the institution. It sounds the pathetic caused by i was expecting organic growth of Bitcoin. However. it's gonna be fully tied to the institution who pump and dump. the fact that this time institutional is doing the opposite thing like blackrock who is keep offloading their Bitcoin.

This can be a signal if we're heading toward the winter season. You know gold, Silver, and even SP500 keep record new ATH while BTC is just dumping even more. It sounds weird, but that's the reality. We're coming to the market that is fully manipulated.

I share the same sentiment. I feel like after Trump became president, especially with the high tariffs and aggressive approaches from large institutions towards Bitcoin, the Bitcoin market feels controlled, perhaps I'm being overly concerned, but the pattern of movement has indeed changed. It's difficult to determine whether this is driven by tariff wars, broader geopolitical tensions or institutional influence, but one thing to consider is that we shouldn't rely too much on those in power without further investigation, as excessive trust in centralized power can be risky. Bitcoin was designed to be self-sufficient and if we ignore this principle, we may gradually allow the very institutions Bitcoin is supposed to challenge to dictate its direction, ultimately turning it into a mere tool for their own gain.

[davis196]

Bitcoin's bull run to 20K USD back in 2017 had nothing to do with Trump. The late 2024-2025 BTC price pump was caused by Trump, but it's over now. The hype around Trump becoming a president for the second time is gone. The hype around Trump's pro-crypto policies is also gone.
We do really need a crypto winter. Bitcoin cannot grow all the time. There will be another FOMO phase after the crypto winter, there's nothing to worry about. The Federal Reserve will start the money printing machine next year. The Russia-Ukraine conflict might get resolved next year.
All these factors will help for the price growth of BTC after the crypto winter.

[buwaytress]

Analysis of SOPR indicators shows that long-term investors are starting to behave like speculators by locking in minimal profits. Short-term holders often trade at a loss.

That's the misnomer I've also picked to point out for several months now. Even on LinkedIn (where it's almost as trashy as X now), you see all this talk about long-term investors and institutionals cashing out or liquidating without even making it to 12 months on the trade. You can't really call yourself long-term if you're not even thinking of multi-year holdings, can you? They're not behaving like speculators to me... they were always speculating.

[Alpha Marine]

I could see you referenced Trump so much in this article, but it's more than you should, TBH. People often neglect the tradition, psychology and dynamics of Bitcoin to start praising a public figure like Trump. During Trump's presidency, he didn't care about Bitcoin, but the Bitcoin community and its tradition made it valuable. This time too, he is a fake bitcoiner (take it or leave it), he's just a politician/businessman who saw crypto as an opportunity to gain more popularity and also enrich his family by selling cryptocurrency and creating their own tokens. All these were carefully planned, and it worked.

I wonder people can't see right through this. Bitcoin's performance in Trump's first term was not because of Trump, because at that time, he was openly against Bitcoin. His tweets about Bitcoin and cryptocurrency are still available on the internet. He called Bitcoin something for criminals and terrorists. I was very surprised to see him show false love for Bitcoin during his second tenure campaign, and people fell for it. A lot of people also saw him as the saviour of Bitcoin or something.

Trump is a politician, always has been, and he will do what a politician does, which is whatever will help him win. I remember saying all these during his campaign. Now he has won, and he doesn't give a shit about bitcoin. As long as he can enrich himself and his family through his projects, he's okay.

[Alpen]

Bitcoin's bull run to 20K USD back in 2017 had nothing to do with Trump. The late 2024-2025 BTC price pump was caused by Trump, but it's over now. The hype around Trump becoming a president for the second time is gone. The hype around Trump's pro-crypto policies is also gone.
We do really need a crypto winter. Bitcoin cannot grow all the time. There will be another FOMO phase after the crypto winter, there's nothing to worry about. The Federal Reserve will start the money printing machine next year. The Russia-Ukraine conflict might get resolved next year.
All these factors will help for the price growth of BTC after the crypto winter.

The economist Nouriel Roubini conducted research proving the link between Bitcoin’s growth and USDT issuance. I’m sure you’ve heard of it. Interestingly, USDT gained its massive traction precisely because of the Trump tax laws regarding cryptocurrency.

Looking at other perspectives, the 2017 rally was often attributed to Japan recognizing BTC as a legal payment method, as well as the launch of Bitcoin futures on the CME and CBOE.

What is your theory on what drove the crypto market in 2017?