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A Binance report describes how crypto markets swung from post-election euphoria to a sharp correction within months. Analysts traced Bitcoin’s surge above $100,000 and its fall to $66,000 to what they termed the “Trump effect”. The report cites political narratives, a meme coin launch, and unmet policy expectations as key drivers behind the shift in sentiment.
According to Binance analyst XMucan, markets reacted immediately after Donald Trump’s election victory. Investors anticipated a pro-crypto administration and swift regulatory changes. As a result, Bitcoin broke above $100,000, while altcoins posted rapid gains.
Group chats and trading channels reflected the mood. Market participants projected Bitcoin at $200,000 by spring. Some forecasts placed Ethereum at $10,000 and BNB at $3,000. Traders described the period as a new cycle driven by government support.
XMucan said those weeks delivered strong returns across the board. He noted that even minor tokens recorded triple-digit gains. Market participants believed a friendlier regulatory stance would accelerate adoption and institutional inflows.
Shortly before the January inauguration, Trump launched the #TRUMP meme coin. XMucan said many initially questioned the announcement. The coin moved from launch to a market value of billions within hours.
Early buyers captured rapid gains. XMucan reported that Trump and his family earned hundreds of millions of dollars. At the same time, late entrants paid higher prices as valuations expanded. Most participants did not enter early. XMucan stated that many retail buyers purchased near peak levels. They assumed a coin tied to a U.S. president carried limited downside risk.
The token then declined sharply. He said buyers near the top lost 80% to 90% of their holdings. He described those affected as students and parents seeking extra income rather than professional traders.
He also noted that Trump did not issue public comments about the crash. There were no statements acknowledging the losses. That silence, the analyst said, intensified frustration among holders who linked credibility to the presidential brand.
Following the inauguration, Trump removed former SEC Chair Gary Gensler and appointed officials viewed as crypto-friendly. Investors expected broader reforms. They anticipated a Bitcoin strategic reserve and a comprehensive regulatory framework.
XMucan reported that no clear policy roadmap emerged in the following months. Instead, attention shifted to tariffs and trade tensions. Markets reacted to those signals. Equity volatility increased. According to XMucan, crypto often amplifies moves seen in traditional markets. Bitcoin retreated from $100,000 to $95,000, then to $85,000 and $75,000.
By mid-February 2025, Bitcoin traded near $66,000. That level marked a decline of nearly 42% from its peak. Altcoins recorded steeper drawdowns during the same period. The analyst said many $TRUMP holders invested out of trust rather than speculation. They believed the association with a president reduced risk. When the token fell without acknowledgment, sentiment shifted.
Also Read: Bitcoin Price Falls to $67,062, XRP Drops Below $2; Ethereum Nears $1,967
The analyst reported that the larger community transitioned to different storylines. The event created a distinction between political identity development and actual market driving elements, according to him. Markets respond to liquidity levels, macroeconomic conditions, and market positioning, but not to individual personalities.
The researcher mentioned talks about restoring American involvement in the USMCA. According to him, trade uncertainty would lead to higher volatility across multiple asset classes. The public maintained negative feelings about the situation until mid-February. The report described the market decline as a correction that followed a period of strong price increase. XMucan asked whether political narratives can sustain price momentum without structural policy support.
The report traced Bitcoin’s drop to $66K to the fading Trump effect after a rally above $100K. The $TRUMP coin collapse and delays in a Bitcoin strategic reserve weakened confidence. Based on the report, political narratives played a role, but macro forces and liquidity drove the broader correction.
