Why Did Bitcoin Fall? Market Volatility Deepens During Trump Era
The cryptocurrency market is experiencing one of its sharpest downturns in recent years. Despite US President Donald Trump’s strong support for digital assets, Bitcoin has fallen to its lowest level in 15 months, unsettling investors. Having lost about 24 percent of its value so far in 2026, Bitcoin dropped to around $65,600 — its lowest point since October 2024.
This decline is particularly striking given Bitcoin’s performance in 2025, when it surged to an all-time high of $122,000 in October. Trump’s pro-crypto stance and promises to improve regulatory clarity had previously fueled investor optimism and increased buying activity throughout last year.
Interest Rate Expectations Drive Selling Pressure
Analysts point to macroeconomic developments as a key reason for the recent drop. According to Deutsche Bank, the downturn was triggered in part by Trump’s nomination of Kevin Warsh as chair of the US Federal Reserve. Markets expect Warsh to adopt a more hawkish stance and potentially keep interest rates higher for longer.
Higher interest rates typically reduce appetite for riskier assets such as cryptocurrencies, while lower rates tend to encourage investment in alternative assets. As a result, expectations around monetary policy continue to exert significant influence over Bitcoin prices.
Deutsche Bank analysts say the four-month downward trend reflects weakening investor interest and growing skepticism about the short-term outlook for crypto assets. While they do not believe cryptocurrencies will disappear, they also doubt Bitcoin will soon return to the peaks seen during Trump’s first year in office.
The bank’s note suggests Bitcoin is transitioning from a purely speculative asset toward something more tangible, but still needs to clearly define its long-term purpose and role in the financial system.
Diverging Views in the Market
Not all experts are pessimistic. William Barhydt, founder of crypto-focused asset management firm Abra Capital Management, believes Bitcoin is maturing and still has room to rise. He argues there is no fundamental reason preventing prices from climbing again, aside from extreme scenarios such as a major global conflict.
Bitcoin’s decline has also been mirrored across the broader crypto market. Ethereum and Solana have both fallen roughly 37 percent in 2026. According to CoinGecko, the total value of the crypto market has dropped by about $2 trillion since October, with $1 trillion of that wiped out in January 2026 alone.
Some investment firms warn of further downside, suggesting Bitcoin could fall as low as $38,000. One research note argues that cryptocurrencies are now following a pattern where they rise when the US dollar strengthens and fall when it weakens — a shift from earlier market behavior.
Trump and Crypto Policy
Since taking office in January 2025, Trump has taken several steps aimed at positioning the United States as the “crypto capital of the world.” He also launched his own cryptocurrency and dismantled certain regulatory enforcement units related to digital assets.
However, Democratic members of the Senate Judiciary Committee claim Trump’s crypto holdings have reached $11 billion and that he has earned roughly $800 million from crypto transactions since taking office.
With the latest decline, Bitcoin has lost around 32 percent of its value over the past 12 months, returning to price levels last seen in early 2024 and even 2021. Going forward, interest rate policy, global economic conditions and regulatory developments are expected to play decisive roles in shaping the crypto market’s trajectory.
