Trump’s Inauguration Triggers Crypto Crash: 4 Key Reasons Explained

The cryptocurrency market has hit a rough patch, with Bitcoin and other major coins losing their recent momentum. After weeks of strong performance, the total market cap has fallen by about 3%, now sitting around $3.54 trillion. This drop comes right after Donald Trump Donald Trump   Donald J. Trump is a US-based entrepreneur, Pro-crypto Politician, and the 45th and 47th President of the United States of America. He understands the importance and needs of the modern fintech world, and people look up to him as a dominant pro-crypto leader.   Quick Facts   Full name Donald John Trump Birth 14-06-1946, New York, United States Nationality American Education BS from the University of Pennsylvania Known For Businessman, Pro-Crypto Politician   Once doubtful about Bitcoindominance, he said in a tweet in 2019, “I am not a fan of Bitcoin", but now has a significant amount of cryptocurrency holdings in his kitty. He has also signed an Executive Order to establish a Strategic Bitcoin Reserve, which highlights his commitment to the future of cryptocurrency.   Donald Trump - Career Highlights & Events   2016 – Elected as the 45th President of the United States from the Republican Party.   2017 – Signed the Tax Cuts and Jobs Act, impacting investment environments   2019 – Criticized Bitcoin and Libra on X, dubbing them as "not money"   2024 – Campaign signals potential openness to crypto-friendly reforms   2025 –  Elected as the 47th President of the United States from the Republican Party.   A meme coin, $TRUMP, is associated with Donald Trump, which is listed on the Solana blockchain platform. His family also backs World Liberty Financial (WLF), a crypto venture.     President ’s presidential inauguration, which many expected would bring good news for the crypto world.

Why Trump’s Inauguration Was Disappointing

Before the inauguration, there was excitement about potential crypto-friendly policies from Trump. However, his speech didn’t mention cryptocurrencies or blockchain technology at all, leaving investors disappointed. This lack of focus on crypto led to speculation that the event became a “sell the news” moment.

The excitement quickly turned to worry, which dampened the optimism that had previously pushed prices up.

Bitcoin ETF Outflows Weigh on the Market

Adding to the market pressure, there has been a significant outflow of Bitcoin ETFs. As of January 22, about $95.62 million worth of Bitcoin ETF outflows were reported, primarily from Grayscale and Bitwise funds, excluding BlackRock’s data. 

These outflows align with the market’s weakening trend, further contributing to the overall decline

Liquidations Pile on More Pressure

The market has also seen major liquidations, which are adding to the downward trend. In the past 24 hours, $243 million worth of positions were liquidated, with long traders taking the biggest hit at $192 million. The largest single liquidation, valued at $5.93 million, happened on the OKX exchange.

Bitcoin and Other Cryptos Decline

Bitcoin, the largest cryptocurrency, has struggled to maintain its gains. It dropped by 2.9% to $102,600 after briefly reaching a record high of over $109,000 earlier this week. 

Other major cryptocurrencies like Ethereum, XRP, and Solana also fell by 3%-4%, while meme coins such as DOGE, SHIB, TRUMP, and PEPE saw sharper declines of 5%-10%.

With the market in flux, it remains to be seen whether the crypto world can regain its footing or if more turbulence lies ahead.

FAQs