Donald Trump’s promise to make the U.S. the world’s “crypto capital,” alongside campaign pledges to slash industry regulations, meant his election in November was widely hailed a watershed moment for digital assets.

Bringing pro-crypto figures like Howard Lutnick into his administration led many to expect that the president would follow through on these pledges. These expectations were further reinforced by the recent announcement and ensuing executive order on establishing a “Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile.”

However, since the beginning of this year, bitcoin’s price has declined, along with other major tokens, prompting many to doubt whether the self-anointed “crypto president” will truly deliver the industry boom that was hoped.

Donald Trump’s Crypto History

Far from historically supportive, Trump previously referred to cryptocurrencies as “highly volatile and based on thin air” in 2019, and to bitcoin as merely “another currency competing against the dollar” during his first term.

During his run for reelection, however, this stance shifted dramatically. The candidate pledged to end the Biden administration’s “anti-crypto crusade,” and to position the U.S. as a global leader in this new financial frontier.

In the weeks after his victory over Kamala Harris, these statements fueled a surge in positive sentiment around cryptocurrency, driving bitcoin past the once-unimaginable $100,000 mark.

Why MAGA’s Crypto Dream May Be Breaking Apart

While his inauguration and subsequent crypto-focused executive orders led many to believe that this trend would continue, cryptocurrencies have experienced significant volatility in the weeks since. Bitcoin fell to below $80,000 for the first time since November last week, with ethereum suffering an even worse fate and seeing all its postelection gains erased.

Bitcoin is currently changing hands at around $88,200, down 5.6 percent since the start of the year and 14 percent since Trump’s inauguration.

“I think the Trump/Crypto honeymoon was a bit overdone, and so it’s good to see some froth come out of the overall market,” investment strategist and bitcoin advocate Lyn Alden told Newsweek.

“While the price drivers behind BTC can be notoriously hard to predict, a few factors have stood out as possible explanations for why it experienced such a severe crash last week,” said Yesha Yadav, Milton R. Underwood Professor of Law at Vanderbilt University and former legal counsel to the World Bank.

Yadav cited the hack of ByBit, a leading cryptocurrency exchange, as a key reason for bitcoin’s recent decline. Approximately $1.5 billion worth of digital currencies were stolen in the attack, which the Federal Bureau of Investigation (FBI) has linked to North Korea, and which “spooked” the market, according to Yadav, resulting in significant sell-offs of both bitcoin and ethereum.

Both Yadav and Alden also highlighted the general correlation between cryptocurrencies and traditional markets, citing the recent downturn in U.S. stocks as another factor behind the decline.

As markets braced for the anticipated impacts of Trump’s tariffs on Canada and Mexico, major indexes such as the Dow Jones, Nasdaq composite, and S&P 500 ended a sluggish February with a string of late sell-offs.

“Bitcoin is a very market-driven and liquidity-driven asset, so it tends to swing around with big moves when that happens,” Alden told Newsweek.

Is the Crypto Dream Really Breaking Apart?

Although these events have impacted bitcoin’s price and sparked doubts about its long-term utility and growth potential, they could be considered exogenous to cryptocurrency itself. Meanwhile, the administration’s recent actions indicate that further gains for decentralized currency may still be on the horizon, keeping the Trump-crypto vision alive.

On Sunday, the president announced via social media that he had ordered his Working Group on Digital Asset Markets to “move forward on a Crypto Strategic Reserve.” Trump said that the stockpile would comprise bitcoin (BTC), ethereum (ETH), as well as XRP, solana (SOL) and cardano (ADA), causing the prices of each token to skyrocket.

“With the crypto market very much in the doldrums last week, the weekend has seen a rapid turnabout,” Yadav told Newsweek. “The announcement of a digital asset strategic reserve—not simply consideration of it—has caused a massive surge in buying across major assets like BTC, ETH, XRP, SOL and ADA.”

Yadav added that the language of “reserves,” as opposed to previous references to “stockpiles,” “suggests perhaps that the U.S. may emerge as a major buyer of these assets down the line.”

As well as the temporary price increases, most of which have now tempered despite Thursday’s executive order, the announcement has been viewed by some as proof that Trump’s promises on crypto were not empty, and that crypto has fully broken into the mainstream asset classes and shed its political stigma.

Geoffrey Kendrick, Global Head of Digital Assets at Standard Chartered, described the move as the “first solid data point of a ‘Trump put’ for crypto,” meaning a government-backed safety net preventing these five currencies from seeing disastrous declines. As a result, Kendrick told crypto-focused outlet The Block that he had reaffirmed his target of $500,000 for bitcoin. Others, however, have criticized the idea of a government-run crypto reserve as antithetical to the purpose of decentralized currency and a poor use of taxpayer funds.

However, the five currencies singled out by Trump are likely to get a further boost on Friday, according to Yadav, when the White House is scheduled to host its first ever Crypto Summit, with many notable individuals from the crypto space scheduled to attend.

What Happens Next?

Cryptocurrency still has its detractors, likely emboldened by last week’s declines and skeptical of the promise of Trump’s national reserve, which would almost certainly need Congressional approval.

“Crypto has no fundamentals. It’s pure speculation. Bitcoin has no use case. So the price is entirely made of shenanigans,” said David Gerard, crypto historian and author of the 2017 book “Attack of the 50 Foot Blockchain.”

Looking ahead, Gerard told Newsweek that bitcoin’s price “could do anything,” but will be determined by the number of “prospective new suckers who will trade their actual dollars for some magic beans.”

Others, however, believe the crypto dream is very much alive, and that bitcoin can recover from last week’s struggles and reach even greater heights in the near future.

“I don’t invest based on hope, but my assessment of bitcoin continues to be long-term bullish, and I expect it to reclaim $100k and continue higher from there,” said Lyn Alden.

“Whether that will happen in 2025 or not is a very different matter,” she added. “That will be highly reliant on overall liquidity conditions and any moves or lack thereof from the Trump administration about potential bitcoin purchases.”