The Next Big Crypto Crash Might Come From Donald Trump Himself, and Itโll Be the Worst
Donald Trump won the election, Bitcoin is literally worth over $107,000 right now, and Wall Streetโs now drooling over crypto like itโs the new gold rush. Sounds perfect, right? Except it actually isnโt.
Thanks to Trump, crypto is sinking its claws deep into everything. Wall Street, banks, pensions, 401(k)sโplaces it never belonged. Thatโs great for investors I guess, but if you ask me and any other true Bitcoin believer, thereโs a dark reality behind the hype.
It is an unwritten law of the world that whatever goes up must eventually come down. So no matter how high Bitcoin goes, it will crash in the end. And the scary part is when it does, itโll be the worst weโve ever seen. Naturally, since the market has never reached current levels.
The higher the stakes, the worse the crash. Just ask Wall Street bros. For years, cryptoโs appeal was its independence from the system. Now, the system is embracing it. Weโre not the rebels anymore, weโre the establishment.
At the July Bitcoin Conference, Trump threw out an idea that stunned everyoneโa โstrategic national Bitcoin stockpile.โ Analysts are taking this seriously. Under Trump, the U.S. could actually start hoarding Bitcoin like itโs gold. If that sounds insane, it gets wilder. This guy wants $15 trillion in Bitcoin reserves.
Even before his election win, the floodgates were opening. BlackRock and other financial giants launched Bitcoin ETFs, giving ordinary investors access to Bitcoin through their brokerage accounts. Crypto is breaking into mainstream finance at full speed but with zero brakes.
Trumpโs crypto army is dismantling the rules โ There will be costs
After the last crash in 2022 when Bitcoin fell apart and billions evaporated, the industry didnโt actually stop. There was no new โkiller appโ or game-changing technology to win back trust. Instead, they played politics.
Over $130 million poured into political campaigns during this yearโs election cycle. The crypto industry sold lawmakers on a story: ignore us at your own risk because โcrypto votersโ are coming for you. The pitch was brilliant, even if the โcrypto voterโ narrative was stitched together out of thin air.
Trump ran with it. His administration is already lining up crypto loyalists for key regulatory roles. Paul Atkins, a longtime critic of financial oversight and a strong crypto lover, is Trumpโs pick to lead the SEC.
Under him, the crypto industry will face less scrutiny, not more. If you think fraud was bad in 2022, just wait. Though Trumpโs playbook doesnโt stop at gutting the SEC. As we speak, Congress is working to move crypto oversight to the Commodity Futures Trading Commission (CFTC).
Compared to the SEC, the CFTC is frankly quite underfunded and far less experienced with cryptoโs retail-heavy markets. The result? A regulatory free-for-all, exactly what the industry wants.
The CFPB is next. The Consumer Financial Protection Bureau was created after the 2008 crash to protect consumers from predatory financial practices. Cryptoโs biggest names hate it. Marc Andreessen slammed the agency, calling it a roadblock for crypto firms.
Elon Musk doubled down, telling the government to โdelete CFPB.โ To be fair, these guys have a point. If Trump and Congress gut the CFPB, itโs open season for crypto platforms, fintech startups, and shady payment systems.
Tens of thousands of people were left stranded when Synapse, a fintech company backed by Marc, collapsed earlier this year. That kind of chaos would only get worse without consumer protections.
Banks and pensions are playing with fire
The last time crypto imploded, banks were relatively safe. Pension funds and 401(k)s barely felt a thing. Regulators made sure of that. The 2022 crash was brutal for retail investors, but hey, at least it didnโt trigger a financial meltdown. That firewall is now crumbling.
The SECโs approval of Bitcoin and Ether ETFs opened the door. Banks and traditional investment firms are stepping in, eager to capitalize on cryptoโs new wave. Now retirement administrators are adding Bitcoin exposure to 401(k) plans. The industry is even fighting to hold crypto directly on their balance sheets.
Itโs not hard to see where this is heading. Crypto firms have already fought to kill protections like SEC Staff Accounting Bulletin 121. The rule forced banks to disclose crypto holdings and keep reserves to back customer assets.
Lawmakers passed a bill in early 2024 to overturn it, but Biden vetoed the attempt. Trump wonโt. Under his leadership, those protections will vanish, leaving banks fully exposed.
But the presidentโs plans arenโt just about deregulation. His World Liberty Financial projectโa decentralized finance (DeFi) platformโis already spending millions on crypto acquisitions. Reports say the project burned through $45 million in December alone.
The real endgame
FTX founder Sam Bankman-Fried spent over $100 million buying political influence. He pitched lawmakers a vision of a regulated crypto future, where firms could โself-regulateโ and innovation would flourish. It was a scam. FTX blew up, and billions of dollars disappeared overnight.
The crypto industry hasnโt changed. Itโs still lobbying hard against regulations. Itโs still pushing lawmakers to look the other way. And now it has Trump in its corner.
Iโd feel safer if I actually trusted that these guys truly believe in Bitcoin. But I donโt, because, at the end of the day, politics really is just politics. If Bitcoin wasnโt going to make Trump richer in any way at all, how many of you can say for a fact that you believe heโd still be all in?
Letโs not be delusional. Every bull run ends in collapse. And every collapse leaves devastation in its wake. The difference now is Bitcoin has grown too big to fail.
A crypto crash under Trump wouldnโt just hurt retail investors and break my heart. It would hit the banking system, pension funds, and the entire global economy. So as we watch Mr. Trump recite the oath of office, beware that a countdown will be starting.
How long do we have until the next โcrypto winterโ?