February 2025 Crypto Boom: What Happened After the 2024 Trump’s Election?

By Nicola Marinelli

March 1st, 2025

Updated by Giulia Stivanello

Early August 2025

As the crypto world faces fresh turbulence in August 2025, it's worth looking back at the events that followed Donald Trump's return to the White House earlier this year. The following article, originally written in the spring, offers a detailed account of how the euphoria of late 2024 gave way to regulatory confusion, political scandals, and market correction. By revisiting the critical months of February and March 2025, we gain valuable perspective on the underlying forces that continue to shape the digital asset landscape today.

Figure 1 Bitcoin price. Source LSEG and author calculations.

The world of cryptocurrencies is once again proving its reputation for volatility. Following a remarkable bull run towards the end of 2024, fuelled largely by optimism surrounding Donald Trump’s return to the White House, crypto markets began to experience a steep decline in early 2025.

In February and March 2025, investors and analysts reassessed their expectations amid a confluence of negative factors, including regulatory uncertainty, scandals involving high- profile political figures, and the largest crypto heist in history. More than $800 billion has been wiped off global cryptocurrency markets, underscoring the depth of the downturn. From an historical perspective it is not yet a generalised rout though, but only a correction (see figure 1): the evaporation of the “froth”, as market participants often call extreme price exuberance. It was notable nonetheless due to a convergence of events.

The 2023-2024 Bull Run: A Political Rally

In late 2022, the collapse of FTX, a major cryptocurrency exchange led by Sam Bankman- Fried, shattered confidence in the industry. The bankruptcy left both institutional and retail investors reeling, and it appeared as though a deep crypto winter had set in. Yet, in a rare development for bankruptcy proceedings, FTX administrators announced in May 2024 that they had formulated a plan allowing 98% of FTX creditors to recover at least 118% of their allowed claims[1]. This unprecedented recovery helped restore faith in the broader crypto ecosystem, contributing to renewed optimism and setting the stage for the market’s strong performance throughout the rest of the year. Throughout late 2023 and 2024, cryptocurrencies surged to near all-time highs, riding a wave of enthusiasm linked to Trump’s increasing favourability among Americans and his eventual election victory (see Figure 2). The Republican leader’s return to power reignited hopes among market participants that his administration would take a more favourable stance toward digital assets, including regulatory clarity for exchanges, smart contracts, and decentralized finance (DeFi).

Figure 2 Trump’s ratings. Source: FiveThirtyEight and author’s notes.

The previous Biden administration had been marked by increasing regulatory scrutiny, with the Securities and Exchange Commission (SEC) and other regulatory bodies cracking down on various crypto entities. Trump’s win was widely interpreted as a potential shift in policy, leading to a surge in capital inflows into the sector.

The Reality Check: February 2025’s Market Correction

However, the euphoria gave way to a harsh reality check. In the first part of the new year,and particularly in February 2025, crypto asset prices went into rapid decline, wiping out much of the gains from the previous months. Several key developments drove this downturn:

• Uncertain Regulatory Moves – Despite initial optimism, the Trump administration had yet to take decisive action in favour of crypto. Traders have grew frustrated that Trump had not moved faster to enact some of the reforms he promised on the campaign trail. While there were expectations for looser regulations and a friendlier stance, policymakers remained largely ambiguous, leaving investors in limbo. The lack of clear pro-crypto legislation dampened market sentiment.

●Meme Coin Scandal and Political Backlash – The new president launched a so-called memecoin in January. Initially greeted with excitement, the token's price plunged more than 80% from its brief high, leading to widespread backlash against Trump for his involvement. Additionally, other meme coins tied to political figures, including Argentina's President Javier Milei and Trump's wife Melania, were implicated in potential pump-and-dump schemes, further eroding trust in the market.

●The Bybit Heist - The largest crypto theft to date only exacerbated fears. In March 2025, Bybit, one of the leading global exchanges, suffered a staggering $1.5 billion hack of Ethereum coins (Ether), reigniting worries about the security of digital tokens held by trading venues. The event raised serious concerns about cyber vulnerabilities, triggering panic selling as investors feared for the safety of their holdings.

●Record ETF Outflows – As the slump deepened, investors pulled nearly a billion dollars from Bitcoin exchange-traded funds (ETFs) on Tuesday, February 25th, according to Bloomberg and The Financial Times[2]. This record exodus from

vehicles that had helped drive crypto prices to record highs just months earlier was seen as a strong sign of declining confidence in the market’s immediate future. ● From Bitcoin exchange-traded funds (ETFs) on February 25th, according to Bloomberg data and the Financial Times[2]. This record exodus from the vehicles

that helped drive crypto prices to record highs late last year is seen as a sign of declining confidence in the market’s immediate future.

●Coinbase's Legal Victory Brought Cautious Optimism and Little Certainty – One potential bright spot amid the downturn was the SEC's proposed dismissal of its long-running lawsuit against Coinbase, announced on February 21st by the company.[3] The SEC’s initial 2023 complaint alleged that 13 regulated tokens on the platform were unregistered securities. While the proposed dismissal sparked cautious optimism among crypto-focused venture funds, it did not fundamentally change the uncertain compliance landscape.

TThe SEC’s move did not necessarily mean that the tokens in the lawsuit were no longer considered securities. Rather, it suggested a shift in the regulator’s posture, possibly awaiting formal Congressional rulemaking rather than pursuing litigation. Industry participants saw this as a potentially positive pivot under the Trump administration. Yet the broader question of whether crypto assets will ultimately be designated as securities, commodities, or something else remained unresolved. The answer would have significant implications for venture-backed startups operating in the space.

Regulatory clarity was likely to require new legislation from Congress, meaning that, for now, uncertainty remained a defining feature of the crypto market. Until definitive regulatory frameworks were established, investors and companies continued to navigate an unpredictable and volatile landscape.

Looking Ahead: What’s Next for Crypto?

With market participants scrambling to reassess their positions, the immediate outlook for cryptocurrencies remained uncertain. If the Trump administration did not provide clearer guidance on its stance toward digital assets, the downtrend looked likely to persist. Additionally, further revelations about the meme coin scandals or additional security breaches could have dealt further blows to investor confidence.

At the same time, some long-term believers in the sector argued that this correction was a natural market cycle and that cryptocurrencies remained poised for future growth, especially if clearer regulations and enhanced security measures were introduced. The potential regulatory shift indicated by the SEC’s move to drop its case against Coinbase could also have provided a much-needed confidence boost.

In early 2025, the industry found itself at a crossroads, caught between the political hope that drove its late- 2024 rally and the sobering realities that soon followed.

Where Do Things Stand Now? (August 2025)

Several months have passed since the events described above, and while the dust has begun to settle, many of the core issues remain unresolved. Trump’s administration has yet to pass any substantial crypto-focused legislation, and the regulatory ambiguity continues to weigh heavily on market confidence.

The initial optimism of late 2024 has faded, replaced by a cautious, wait-and-see approach. Some players are exiting the space altogether; others are quietly building, hoping for clearer skies ahead. The next chapter for crypto may depend notj ust on political action, but on whether the industry can regain trust,both from regulators and from the public.

[1] “FTX Files Consensus-Based Plan of Reorganization” 07 May 2024 https://www.prnewswire.com/news-releases/ftx-files-consensus-based-plan-of-reorganization-302138948.html

[2] “Rout wipes $800bn from crypto market as bitcoin slump deepens” 26th February 2025 https://www.ft.com/content/c5a58f35-1c10-4a2f-90f0-65e8b27427ce

[3]“Righting a major wrong” 21stFebruary 2025 https://www.coinbase.com/en-gb/blog/righting-a-major-wrong