Trump’s ‘Crypto Golden Age’ Ends in $2T Market Rout

The "Trump Trade" has officially round-tripped. As of February 7, 2026, Bitcoin has erased every dollar of gain since the November 2024 election, sliding back into the $60,000 zone and dragging the broader digital asset market into a $2.2 trillion collapse.

What was promised as a policy-driven supercycle has dissolved into a structural liquidity crisis. Despite the Trump administration signing the GENIUS Act into law last July, finally giving stablecoins a federal framework, the market ignored the regulatory win and fixated on the exit door. The result is a total unwinding of the "policy premium" that drove the total market cap from $2.4 trillion in late 2024 to its dizzying peak of $4.38 trillion in October 2025.

The $19.5 Billion Signal

The collapse didn't happen in a vacuum. Market structure began to fracture on October 10, 2025, when a record $19.5 billion in leveraged positions were liquidated in a single session. According to data from The Kobeissi Letter, this event broke the bullish market structure, leaving order books fundamentally impaired.

"Bitcoin market depth remains 30% below October peaks, matching conditions last seen after the 2022 FTX collapse," noted a Blockonomi report analyzing the rout. "This cross-asset contagion suggests the decline stems from liquidity issues rather than crypto-specific problems."

Since that October fracture, selling pressure has been relentless. More than $1 trillion in value has evaporated in the last month alone as "buy the dip" exhaustion set in. Bitcoin, which touched an all-time high of $126,000, is now trading nearly 50% below that mark, forcing late entrants and corporate treasuries to mark massive unrealized losses.

Policy Wins, Price Losses

The divergence between political victories and price action is the defining anomaly of this cycle. The Trump administration delivered on its core promises:

• The GENIUS Act: Signed on July 18, 2025, it mandated 1:1 reserve backing for payment stablecoins and prioritized holder claims in insolvency.
• The CLARITY Act: Advanced through the House to delineate CFTC vs. SEC jurisdiction.
• SAB 121 Repeal: Banks were cleared to hold crypto assets.

Yet, these structural improvements failed to counter the macro headwinds of a 100% China tariff shock and hawkish Federal Reserve maneuvering. The "Golden Age" narrative convinced retail and institutions to leverage up just as global liquidity began to contract. The GENIUS Act provided safety for stablecoins, but it did nothing to prop up the speculative risk curve.

The Leverage Hangover

The damage is concentrated among those who bought the narrative rather than the spot asset. While exchanges and stablecoin issuers profited from the volatility, corporate treasuries, specifically those mimicking MicroStrategy’s playbook, are facing shareholder revolts as balance sheets turn red. With Bitcoin hovering near $60,000, the market is structurally thinner than it was pre-election. A $2,000 price drop that required massive volume in 2024 now occurs on thin air, as market makers have pulled quotes to avoid toxic flow.

The era of "Trump guarantees number go up" is over. The market is now pricing in a harsh reality: regulatory clarity is not a substitute for liquidity.