Bitcoin Drops Under Trump’s Second Term
Bitcoin has taken a hit since President Donald Trump returned to office. After peaking at over $100,000 on Inauguration Day 2025, the cryptocurrency now trades near $81,000. The broader market hasn’t fared much better: the S&P 500 is down about 12% year-to-date.
Despite this dip, some investors see an opportunity. Trump’s new policies — especially the strategic crypto reserve and sweeping tariffs — could lay the groundwork for Bitcoin’s next major bull run.
Strategic Crypto Reserve Boosts Legitimacy
On March 3, Trump announced the creation of a strategic cryptocurrency reserve, including Bitcoin, Ethereum, XRP, Solana, and Cardano. While the reserve will consist only of crypto seized through legal proceedings — not purchases on the open market — it sends a strong message:
The U.S. now officially treats Bitcoin and other tokens as legitimate reserve assets.
This symbolic backing could open the door to institutional investment. Pension funds, hedge funds, and sovereign wealth funds may now feel more comfortable holding Bitcoin, which could drive massive demand in coming years.
Tariffs May Drive Down the Dollar, Boost Bitcoin
Historically, Bitcoin thrives when the U.S. dollar weakens. And although tariffs often strengthen the dollar, Trump’s latest trade policies seem to be doing the opposite.
Since Trump announced new tariffs in April, the U.S. Dollar Index has fallen about 1.8%. Going back to his January tariffs on Canada and Mexico, the index is down 5.5%.
A weaker dollar makes Bitcoin and other alternative assets more appealing. As capital flows out of U.S. markets, Bitcoin stands to benefit.
Investors are increasingly turning to Bitcoin as a hedge against fiat currency depreciation and economic uncertainty.
Bullish Outlook Despite the Current Dip
Bitcoin may be down over 25% from its January peak, but the long-term fundamentals remain intact:
- Limited supply: Bitcoin’s halving in April 2024 reduced issuance.
- Institutional adoption: More corporations are adding Bitcoin to their balance sheets.
- Policy support: The U.S. is now implicitly endorsing Bitcoin via its strategic reserve.
As the dollar declines and regulatory clarity improves, Bitcoin could soon retest — and surpass — its all-time highs.