Bitcoin Loses Trump-Era Gains as Crypto Market Volatility Signals Uncertainty

Reduced liquidity and investor concerns about inflated tech valuations contribute to Bitcoin's slump.

Published on Feb. 7, 2026

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Bitcoin has wiped out all of its price gains since the election of former U.S. President Donald Trump, as liquidity is expected to remain thin in the near future. The cryptocurrency's slump alongside other digital asset prices coincides with investor concerns about inflated tech valuations and the uncertain path of U.S. Federal Reserve rate cuts. Analysts say the trend in liquidity is truly concerning, with Bitcoin's average market depth falling significantly since October 2025.

Why it matters

The volatility in the crypto market, particularly Bitcoin, has raised questions about the outlook for digital assets in the year ahead. The end of 2025 proved to be tumultuous, with the largest crypto liquidation event in history following Trump's announcement of new tariffs on Chinese imports. The points of crossover between the crypto world and mainstream finance, including stablecoin reserves, crypto-related stocks, and bank exposure to crypto, have all grown in recent years, making Bitcoin more sensitive to macroeconomic and geopolitical developments.

The details

Bitcoin's slump has coincided with investor concerns about inflated tech valuations and the uncertain path of U.S. Federal Reserve rate cuts. Crypto data provider Kaiko's research analyst Thomas Probst said the contraction in the crypto market has been ongoing for several months and is likely to persist for some time, as reduced liquidity translates into sharper and more erratic price movements. The Trump administration's friendly stance toward crypto helped give Bitcoin a major boost last year, sending it to an all-time high above $125,000 in October. However, Trump's introduction of pro-crypto policies in 2025 has not stemmed the latest price declines, with Bitcoin falling below $61,000 on Thursday, its lowest level since a month before Trump's election.

  • On October 10, 2025, the largest crypto liquidation event in history occurred after Trump announced new tariffs on Chinese imports.
  • On Thursday, Bitcoin fell below $61,000, its lowest level since a month before Trump's election.

The players

Thomas Probst

A research analyst at crypto data provider Kaiko.

Donald Trump

The former U.S. President whose administration's friendly stance toward crypto helped give Bitcoin a major boost last year.

Denny Galindo

An investment strategist at Morgan Stanley Wealth Management.

James Butterfill

The head of research at crypto asset manager CoinShares.

Andrew Moss

The head of digital assets research at Jefferies.

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What they’re saying

“This contraction has been underway for several months and remains ongoing, suggesting it is likely to persist for some time.”

— Thomas Probst, Research Analyst, Kaiko (Kaiko)

“The flash crash back in the fall was this kind of pin that popped the leverage bubble.”

— Denny Galindo, Investment Strategist, Morgan Stanley Wealth Management (Morgan Stanley Wealth Management)

“There are several things signifying that we are very close to a bottom, if not having achieved it.”

— James Butterfill, Head of Research, CoinShares (CoinShares)

“We see few bullish indicators that suggest we may be approaching the bottom.”

— Andrew Moss, Head of Digital Assets Research, Jefferies (Jefferies)

What’s next

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The takeaway

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