"It wasn't supposed to go this way for the crypto industry. President Trump got re-elected vowing to make the U.S. "the crypto capital of the world." Since he retook office, he has appointed regulators known to be friendly with the industry, while the Republican-led Congress has passed legislation that many critics believe goes too easy on the sector. And at first, crypto soared."
"Many not only traded cryptos, they also borrowed heavily to scoop up even more of them. All that borrowing juiced profits when bitcoin and other cryptos were surging. But as soon as the value of bitcoin started falling, the reverse happened: It magnified the losses. The moment that sparked that decline was on Oct. 10, when Trump threatened to impose an extra 100% tariff on Chinese imports on top of the 30% already in place."
"That spooked traders, who dumped a whole slew of investments, from stocks to currencies. Stocks eventually recovered and then some. The Dow Jones Industrial Average, for example, hit its latest record high on Friday. But for crypto, the losses caused by all that borrowing and speculation deeply shook investors, reminding them of the sector's volatility. And it created a contagion effect, where big declines spooked more and more people into selling."
President Trump's reelection, industry-friendly regulator appointments, and Republican-led legislation created favorable conditions for crypto. Bitcoin nearly doubled from November 2024 to an October 2025 peak near $126,000 per coin. Many investors borrowed heavily to amplify positions, boosting gains while prices rose. On Oct. 10, a threatened additional 100% tariff on Chinese imports triggered broad market selling. Stocks later recovered, but the leveraged positions in crypto magnified losses, causing steep declines and a contagion of selling that pushed bitcoin down to roughly $60,000 and erased much of earlier gains.
Read at www.npr.org
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