Top 5 Reasons Why the Crypto Market is Down Today: Is Trump to Blame?

The cryptocurrency market has taken a hit, with the total market cap dropping by 3.64% since January 22, 2025. Altcoins saw a 2.72% decline, and the market cap excluding the top ten cryptocurrencies fell by 5.2%. Over the past 24 hours, major cryptos have been in the red: Bitcoin and Ethereum are down 3% each, XRP by 2%, Solana by 2.5%, BNB by 1.9%, Dogecoin by 3.5%, and Cardano by 3.5%.

Let’s explore the key factors behind this market slump.

Key Reasons Behind The Latest Crypto Selloff

No Crypto Talk from Trump

The crypto community had high expectations for former President Trump’s inaugural speech, hoping he would unveil plans for a Bitcoin reserve. Instead, Trump avoided any mention of cryptocurrency, leaving enthusiasts disappointed.

On a brighter note, the U.S. Securities and Exchange Commission (SEC) has announced a Crypto Task Force. This move aims to create a clearer regulatory framework for the industry, offering a small but important step forward.

Bank of Japan Rate Hike Impact

The Bank of Japan might raise interest rates by 25 basis points to 0.5%—a significant jump from its current 0.25%. This would mark the highest rate in nearly two decades. Japan started 2024 with rates at -0.1%, increased them to 0.1% in March, and to 0.25% in July. If the expected hike materializes, it could have global market implications.

US Federal Reserve Meeting

The U.S. Federal Reserve is unlikely to cut interest rates at its January 29 meeting, despite signaling two potential cuts in 2025. Last December, the Fed reduced rates by 25 basis points to a range of 4.25%–4.5%. However, with the U.S. economy showing signs of weakness, additional cuts this year seem off the table.

US Dollar Index and Treasury Yields

The U.S. dollar index has climbed 4.16% since November 5, rising from 103.901 to 108.227.

Similarly, the 10-year Treasury bond yield reached 4.6357% on January 6, the highest level since April 2024. Although it faced some pressure earlier in January, yields have been trending upward since mid-month, further straining markets.

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BTC and ETH Options Expiry

Upcoming options expirations are adding to the market’s instability. A total of 29,000 Bitcoin options (valued at $3 billion) and 169,000 Ethereum options (valued at $0.5 billion) are set to expire soon, putting additional pressure on prices.

Tough Time for Crypto?

The recent crypto selloff reflects a mix of macroeconomic challenges, political letdowns, and market-specific pressures like options expiry. As Bitcoin, Ethereum, and other cryptos struggle amidst these uncertainties, investors must closely monitor regulatory updates, interest rate decisions, and market trends.

Stability may only return with improved macro conditions or renewed institutional confidence.