Trump to the Rescue? Why the Market Crashed Despite the President’s Crypto Support
At the beginning of 2025, Donald Trump's return to power led to a sharp revision of the government's crypto policy and explosive market movements. The Trump administration declared a pro-crypto stance, from establishing a strategic Bitcoin reserve to softening the Securities and Exchange Commission (SEC) positions. However, instead of a prolonged rally, the Web 3.0 industry faced volatility and liquidity outflows. Why did the market drop despite expectations of support?
The key question is why the crypto market declined when many believed that a pro-Republican administration would drive growth instead. According to experts, the market had already priced in the 'best-case scenario.' When the anticipated multi-billion-dollar government Bitcoin purchases turned out to be mere verbal commitments with no actual buying, traders rushed to take profits.
The classic rule of 'buy the rumor, sell the news' played out. However, the government fund did not start purchasing BTC, removing a strong hypothetical growth driver and instead triggering a sell-off. Institutional investors used the rally to exit Large funds began selling BTC and ETH futures as early as February 2025, locking in profits from December 2024's peaks.
By March, this trend had intensified. The futures curve flipped into backwardation (futures prices falling below spot prices) – a typical signal of declining capital inflows. The broader macroeconomic factors such as inflation and interest rates have been affecting the cryptocurrency market
The current correction in the crypto market is a result of various external and internal forces, but one thing is clear: the regulatory landscape has changed.
Web 3.0 founders should plan for two phases – stabilization and growth. In the stabilization phase, preserving resources, maintaining the team, refining the product, and satisfying existing users are crucial. Founders must avoid unnecessary risk now and focus on achievable short-term goals.
During the growth phase, scaling ahead of competitors will be critical. This means having a well-prepared strategy for acquiring users and capital. Web 3.0 startups should start thinking like Web 2.0 businesses with a clear business model, strong value proposition, and path to profitability.
The projects that will thrive are those with real revenue, engaged users, and fundamental utility. Founders should honestly evaluate their projects – if the product doesn’t solve a real problem or lacks product-market fit, it may be time to pivot or merge with other teams before it’s too late. Conversely, if there's a solid core, doubling down on execution will position the project as a leader when the next cycle begins.
The current crypto market correction differs from past downturns due to the heightened role of institutional players and new structural dynamics such as ETFs and arbitrage. Bitcoin now reacts not just to retail demand but also to moves by major funds and governments, introducing new forms of volatility.
However, fundamentally, the Web 3.0 industry is gaining something invaluable – political support at the highest level of the US government – even if driven by questionable motives. This lays the groundwork for long-term growth. Challenging months lie ahead, but the projects that navigate the storm will be at the forefront of the next bull run.
Yaroslav Kalynychenko is the head of marketing at Generis Web3 Agency and an expert in promoting crypto, fintech, and innovative digital solutions. Follow Us on Twitter Facebook Telegram Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.