Bitcoin Price Outlook Is Crypto Back to Square One Under Trump?

President Donald Trump’s second victory at the ballot box unleashed spirited action by crypto enthusiasts, driving an 80% climb in the bitcoin price. But with bitcoin in bear market territory after tumbling 52% from its record high in October, the go-go times now look like a no-go. Is the cryptocurrency industry back to where it started?

In terms of price, yes — at least for the moment. But in terms of industry regulation, infrastructure and confidence, Trump’s first year back in office clearly moved the industry ahead, experts say. Banks have launched stablecoins, young companies staged IPOs and a federal bitcoin treasury now exists to provide “responsible stewardship of the government’s digital assets.”

While work remains to pass the Clarity Act, which seeks to create a clear regulatory framework to support growing use of digital assets, its potential passage and several other factors could be driving forces in the coming year. Analysts caution that further bitcoin price declines are possible. But many, while scaling down their views from loftier forecasts, project record highs this year beyond last October’s peak near $126,200.

“I think we’re building the foundations here that are going to evolve and grow over the next three years of this presidency,” said Greg Benhaim, executive vice president of product and head of trading at digital asset manager 3iQ.”If you ignore price, the amount of positive momentum we have — the amount of tokenized assets that are being launched, tokenized equity, the amount of industries that are integrating blockchain into their day-to-day operations — all of these play a large role in adoption,” Benhaim said.

Cryptocurrency Policy Promises By Trump

President Trump campaigned on the promise of making America the “crypto capital of the world.” He vowed to establish a strategic national bitcoin reserve and a crypto advisory council. He also pledged to fire SEC Chair Gary Gensler, who many in the crypto industry saw as stifling innovation. (Gensler stepped down after the election.)

So heading into 2025, bitcoin price targets were widely — if not wildly — optimistic. Bernstein put the year-end price at $200,000. H.C. Wainwright set a $225,000 target. By early December 2025, Bernstein had revised its bitcoin price target to $150,000 for 2026, with a potential peak at $200,000 in 2027. The firm maintained its long-term 2033 price target of around $1 million.

Standard Chartered halved its 2026 target to $150,000 from $300,000. The total market cap for cryptocurrencies climbed to $3.7 trillion in early December 2024 after Trump’s election victory, and grew to $4.2 trillion in October 2025 as bitcoin surged to all-time highs. But the overall crypto market has since fallen back near $2.31 trillion as of Friday.

Why Is Bitcoin Price Down?

“We see the sell-off as a result of several overlapping forces,” said Joel Kruger, market strategist at LMAX Group. “Expectations had become stretched around the idea that bitcoin would not revisit sub-$100,000 levels, and when Q4 failed to deliver the upside momentum many priced in, positioning quickly unwound. Adding to the discomfort is that this pullback is unfolding just as structural progress and mainstream adoption arguably look stronger than ever, making the correction psychologically harder for participants to absorb.”

Kruger noted that crypto has struggled to attract buyers, “despite equities pushing to fresh highs and metals continuing to surge, leaving digital assets looking isolated in the broader landscape.” Growing uncertainty around the Fed outlook, the Fed’s independence and the durability of future easing has also weighed on sentiment, he said, “reinforcing a more cautious tone.”

Wenny Cai, chief operating officer at crypto derivatives exchange SynFutures, recently noted that bitcoin’s move below $70,000 “accelerated a broader deleveraging” and flushed out crowded positions from the post-ETF rally. The first spot bitcoin ETFs launched in early 2024. “Liquidations have been heavy, sentiment has swung risk-off, and price action is now being driven more by balance-sheet mechanics than narrative flow,” Cai said.

Strategy Stock And Its Bitcoin Price Quandary

The industry’s highest-profile study in balance sheet mechanics may be Strategy (MSTR). The bitcoin price crash fanned concerns over the company’s business model as the largest commercial bitcoin treasury. Strategy paid $54.3 billion for its bitcoin, which fell to values near $50 billion during the price crash. The leading question: How much of a drop would be needed to force the company to sell holdings to raise cash to service its hefty debt load.

But during the Feb. 5 earnings call, founder Michael Saylor and CEO Phong Le assured investors that they’re “not worried” about the company’s debt. Strategy is the largest public holder of bitcoin, with 713,502 in its coffers. Bitcoin has a maximum supply of 21 million, with about 95% of that already in circulation. Strategy shares jumped 26% during the next stock market session after the call, leaving it down more than 70% from July’s record high.

Trump Crypto Policy Progress

After the election, Trump was quick to start acting on his campaign promises. Shortly after the Jan. 23, 2025 inauguration, he signed the “Strengthening American Leadership in Digital Financial Technology” executive order. This moved forward many of his initiatives. It established the Working Group on Digital Asset Markets, headed by early PayPal executive David Sacks. The group explores regulatory proposals for digital assets, stablecoins and creating a federal digital asset stockpile.

The order also addressed concerns from crypto industry leaders about de-banking under the Biden administration. It prohibited the establishment and use of Central Bank Digital Currencies in the U.S. People had high expectations when Trump entered office, given all the chatter surrounding the crypto acts, 3iQ’s Benhaim said. But the expectations for legislation weren’t necessarily realistic. “We work in an industry that moves at lightning speed and has this expectation that the rest of the world does at the same time,” he added.

Also as promised, Trump in March established the strategic bitcoin reserve, as well as a separate digital asset stockpile of other cryptocurrencies. The reserves were formed largely from assets seized by the Treasury and other federal departments. The agencies are instructed to find “budget neutral” ways to acquire or otherwise own assets, but not to sell them — to simply hold them, like a digital Fort Knox.

However, Timot Lamarre, director of market research at bitcoin financial services firm Unchained Capital, notes that the announcement fell flat. It didn’t include guarantees to purchase bitcoin, he adds. That would have introduced a “new pool of demand.”

What Clarity Bill Status Means For Bitcoin Price

Meanwhile, the Clarity Act raised hopes for a favorable regulatory system. The bill passed the House but is still working its way through the Senate. The Senate Agriculture Committee hosted its markup hearing in January, passing its portion of the bill along party-line votes. The Senate Banking Committee delayed a scheduled mid-January meeting after Coinbase and its CEO, Brian Armstrong, pulled support.

One major point of contention regards stablecoin rewards, which are interest payments for parked funds. The Genius Act, the stablecoin bill signed into law last year, prohibited rewards payments. But some companies have exploited a loophole allowing issuers to indirectly fund payments to holders, according to the American Bankers Association.

The ABA wrote to the Senate in January and urged representatives to close the loophole. The note warned that stablecoins may become competitors to banks and siphon away customers and deposits, which could affect lending and compromise community banks. But Coinbase’s Armstrong and Robinhood (HOOD) CEO Vlad Tenev contend stablecoin rewards are critical for the crypto industry and preventing China and other overseas competitors from dominating the landscape.

“We want to make sure any crypto legislation in the U.S. does not ban competition,” Armstrong said at the World Economic Forum in Davos, Switzerland, claiming that lobbyists in Washington, D.C., are “trying to put their thumb on the scale.” He added that overseas competition will flourish if U.S. stablecoins are barred from paying rewards. Still, the legislation is making “good progress” while a “good round of negotiating (is) happening,” he said.

White House Meeting Over Stablecoin

Earlier this month, the White House corralled a group of banking and crypto leaders to hash out the stablecoin discrepancies. It reportedly ordered the two sides to come to an agreement by the end of February. “Banks of all sizes will continue to work with lawmakers, the White House and other stakeholders to develop thoughtful, effective policy around digital assets,” the ABA wrote in a joint statement with several banking groups. The groups added, though, that “we must ensure any legislation supports the local lending to families and small businesses that drives economic growth and protects the safety and soundness of our financial system.” Cody Carbone, CEO of  bitcoin, blockchain and digital asset advocate The Digital Chamber, said in a statement that the meeting was “exactly the kind of progress needed.”

“We look forward to continuing this kind of work to ensure market structure rules of the road will become law before this Congress ends,” he said. Treasury Secretary Scott Bessent, at a Senate Banking Committee hearing on Feb. 5, said the U.S. crypto industry can’t advance unless the Clarity Act passes. “It’s impossible to proceed without it. We have to get this Clarity Act across the finish line,” he said. Lamarre at Unchained says the bill includes provisions that protect bitcoin, software and decentralized finance developers, as well as self-custody protections, and clearer rules-of-the-road that would help the industry develop further.

Crypto Stock IPOs Await Clarity Act?

LMAX’s Kruger believes more crypto players will emerge if the Clarity Act passes. Despite slower-than-hoped legislation, the Genius Act and President Trump’s other 2025 crypto initiatives gave a number of firms the confidence to come off the sidelines. Stablecoin issuer Circle Internet Group (CRCL) launched its IPO in early June and soared during the first day of trade. Peter Thiel-backed crypto exchange Bullish (BLSH) followed in August. Gemini Space Station (GEMI), Figure Technologies (FIGR) and Trump family-linked American Bitcoin (ABTC) all began trading publicly in September. American Bitcoin went public via a reverse merger.

Matthew Sigel, head of digital asset research at VanEck, said these “very successful” IPOs created “meaningful value,” despite drawdowns late in the year. If the new crypto legislation had met more resistance, he said, they likely would have waited on the sidelines. “Overregulation intends to entrench incumbents, but the Trump administration is doing the opposite by instructing the SEC to relax enforcement and set standards,” Sigel said. “That’s encouraging more competition in an early-stage industry where many of the winners and losers are not known.”

Overall, the deregulation is a strong tailwind for dynamism and innovation within the crypto industry, according to Sigel. “It will take time for the winners and losers to separate,” he said. Various firms are already planning 2026 launches. Cryptocurrency exchange Kraken is reportedly targeting a launch in the first half of the year. Infrastructure provider Consensys and wallet provider Ledger are aiming for late 2026 IPOs, according to reports. And BitGo (BTGO) is already out the gate; the crypto custodian launched its IPO on Jan. 22.

Other Ways Crypto Market Is Growing

In another sign of the industry’s development, more companies are moving to put assets on the blockchain. BlackRock (BLK), Franklin Templeton and Fidelity all started to tokenize funds last year. The total amount of tokenized U.S. Treasuries crossed $9.11 billion by late November, up from around $1 billion in January 2024, The Street reported. BlackRock CEO Larry Fink, in an October interview with CNBC, said the financial industry is at “the beginning of the tokenization of all assets.”

The New York Stock Exchange on Jan. 19 announced a tokenized securities platform, which will facilitate 24/7 trading for U.S. equities and ETFs. The move is part of the Intercontinental Exchange’s broader digital strategy. This includes working with BNY (BK) and Citi (C) to support tokenized deposits across its clearinghouses. Meanwhile, big financial companies including JPMorgan Chase (JPM) and Fidelity pushed further into stablecoins after the Genius Act passed.

The AI Play For Bitcoin Miners

At the same time, a number of bitcoin miners have been expanding their business models to include artificial intelligence cloud service and high-performance computing infrastructure. Sigel believes  bitcoin and AI will continue to move hand-in-hand. “Both are transformative digital technologies that require substantial energy resources. And the bitcoin miners diversifying their business and lowering their cost of capital sets them up to potentially reinvest in both industries,” he said.

Iren (IREN) has been highly praised for its AI shift, after announcing in August it had achieved preferred partner status with Nvidia (NVDA) and signed cloud-services deals with Microsoft (MSFT). Its shares have gained 192% since the end of July. Also in August, TeraWulf (WULF) landed and expanded AI hosting deals with Fluidstack, which included backing from Google parent Alphabet (GOOGL). WULF shares have since gained 222%. In October, Cipher Mining (CIFR) entered a long-term capacity deal with Amazon‘s (AMZN) Amazon Web Services. Morgan Stanley initiated coverage of WULF and CIFR on Feb. 8 with outperform ratings due to their bitcoin-to-data center conversion strategies and AI’s massive power needs.

Many miners have been selling their tokens and bitcoin to fund these pivots, placing added pressure on bitcoin prices. Repurposing data centers is very capital-intensive, Sigel says. He expects some of that selling pressure to abate if bitcoin rallies. But “if America becomes the leader in AI,” Siegel points out, “it’s probably because we set the conditions to also become leaders in bitcoin and energy self-sufficiency.”

Signs Of A Bottom In Bitcoin Price?

Bitcoin rebounded back above $70,000 on Feb. 6, coinciding with a recovery in gold and silver prices. LMAX strategist Kruger believes the market is “significantly closer to a cyclical bottom, with the balance of risk shifting decisively toward the upside.” “Many of the hallmarks of capitulation are now in place. Daily technicals are deeply oversold, the fear and greed index has slipped to extreme lows, and bitcoin has declined more than 50% below its October peak,” he said. Kruger expects any further setbacks to be “exceptionally well-supported” above August 2024’s low of $49,000. “We expect bitcoin to form a major cyclical low during Q1 2026, setting the stage for a sustained recovery that carries it back above $100,000 and toward a retest of its October 2025 all-time high,” he said.