The crypto industry may have to wait until 2026 to regain substantial forward momentum.

In 2025, the Trump administration has delivered a series of "gifts" to the cryptocurrency industry. The U.S. Securities and Exchange Commission (SEC) has suspended enforcement actions and investigations into major cryptocurrency exchanges and companies, such as Coinbase, Gemini, Uniswap, OpenSea, and ConsenSys. The White House has also issued an executive order aimed at enhancing U.S. leadership in the digital asset industry and has expressed interest in establishing Bitcoin reserves.

However, these measures have not been sufficient to prevent the recent decline in Bitcoin prices or the overall negative sentiment in the crypto industry. As of this writing, Bitcoin is trading at $84,000, down 18% since Donald Trump's inauguration, 23% from its all-time high, and the total market cap of cryptocurrencies has fallen by 21%.

Where Is the Bottom for Bitcoin in This Cycle?

Kavita Gupta, founder and general partner of Delta Blockchain Fund, said, "It feels like all the good news in the crypto space has happened, and the industry's positive progress seems to be due to the whims of high-level politicians, lacking proper processes and due diligence... The situation could change at any time, and sustainability is questionable."

Currently, the three main forces driving the market downward may push it further before it can regain its footing and begin to recover. In fact, the crypto industry may have to wait until 2026 to see a sustained bull market momentum again.

Internal "Cannibalization"

There are many explanations for the recent decline, starting with the behavior of cryptocurrency participants themselves. For example, the industry has been negatively impacted by multiple meme coin fiascos, such as $MELANIA and later $LIBRA, which even involved Argentine President Javier Milei in a scandal. Now, meme coin issuance and trading activities across the industry are declining, raising questions about their long-term sustainability. For instance, the daily issuance of new tokens reached a local peak of 66,471 on January 24, just six days after the launch of $TRUMP. On February 27, the latest available full data day, this number dropped to 27,741, a decrease of 58%.

Brian Rudick, head of research at GSR, commented on these figures, saying, "People once thought meme coins were the fairest and most effective form of speculation in the crypto space, but $LIBRA showed that this was not the case. Now you see a significant reduction in on-chain trading volumes, and while meme coins are the most affected, this is dragging down the entire crypto space."

Moreover, the $1.5 billion hack on Bybit by North Korean hackers (the largest theft in crypto history) has once again raised questions about the safety of investing in cryptocurrencies. Gupta noted, "These hacking incidents make outsiders think that even after 10 years of development, the industry has not truly matured."

External Headwinds

All of this negative sentiment within the industry is being amplified by a broader reduction in risk appetite among investors. Typically, a new administration would boost consumer confidence, and business leaders initially welcomed Trump's election due to his pro-business stance. However, new data shows that consumer confidence is weakening, possibly due to Trump's threat to impose 25% tariffs on trade partners such as Canada, Mexico, and the EU.

The Conference Board's Consumer Confidence Index reported a third consecutive monthly decline in February, reaching its lowest level since August 2021. The University of Michigan's consumer sentiment survey also showed a significant drop in consumer confidence. The report noted, "Consumer sentiment continued the downward trend seen earlier this month, falling nearly 10% from January. This decline was widespread across age, income, and wealth groups."

The report also mentioned that inflation expectations for the next year rose from 3.3% to 4.3%, the highest level since November 2023, and marked an unusually large increase for the second consecutive month. The current reading is far above the pre-pandemic range of 2.3%-3.0%.

Rudick pointed out, "According to the latest data from the CME FedWatch tool, the market expects two interest rate cuts this year. But if these expectations are completely erased due to tariff issues, traditional markets could fall more than cryptocurrencies."

How Low Could Bitcoin Go?

It is difficult to accurately predict how much lower Bitcoin could fall from here. Steve Sosnick, chief strategist at Interactive Brokers, said that even among commodities, Bitcoin is unique. "You know the supply and demand for crude oil, coffee, or cocoa. Bitcoin doesn't have that kind of intrinsic demand. Its existence is purely for speculative or investment purposes."

However, Sosnick pointed out several technical charts that could provide some guidance for price thresholds investors should watch. One chart is Bitcoin's 200-day simple moving average. At current prices, the asset is approaching its first test of this key indicator since its clear breakout in mid-October last year. If this happens, it means the asset would fall below $80,000, and Sosnick believes the next threshold would be the "high $60,000/low $70,000 range."

Waiting for the Wind: 2026?

Given all these negative forces impacting Bitcoin's price, the crypto industry may have to wait until 2026 for Bitcoin and the entire industry to regain substantial forward momentum. When asked what types of internal or external factors might play a role in this process, the answers are two-fold: strategic Bitcoin reserves or legislation that once and for all sets the rules for the industry.

While the crypto community has long hoped for strategic Bitcoin reserves, the White House's executive order aims to assess something different: a Federal Reserve, where the government would hold bitcoins acquired through law enforcement actions, rather than a strategic reserve, where the government would purchase new bitcoins. (However, many states are assessing their own strategic reserves, though few have made meaningful progress.)

Rudick believes that something like a Bitcoin reserve could be beneficial for the industry, but this is far from guaranteed: "[Reserves] have always seemed unlikely to me, but I do think Bitcoin could easily hit $500,000. Even if we don't get it in the form of a strategic Bitcoin reserve, I do think the U.S. could create a sovereign wealth fund and add Bitcoin."

For Rudick, a more sustainable path to growth is through market structure legislation that allows regulated companies to enter the field legally, but he believes the industry will have to wait until next year for meaningful progress: "[Legislation] might not happen until 2026. But in my view, this is so important because it's what's needed for large-scale institutional entry."

As evidence, he pointed to a recent statement by Bank of America CEO Brian Moynihan, who said that if the rules for the industry became clearer, his crypto-averse bank would consider launching a stablecoin. (At least one source close to Washington negotiations believes that stablecoin legislation could even be signed into law in 2025.)

Until then, the industry needs to remain stable to withstand these headwinds. After all, such dramatic swings in investor sentiment are part of the significant risks of investing in cryptocurrencies.

Sosnick summed up the current market situation in one sentence: "Markets usually climb the stairs on the way up and take the elevator on the way down. Bitcoin this time took the elevator to the top floor and now it's taking the elevator to the basement. It's a highly volatile asset. If volatility is in your favor, that's great—but when it swings the other way, it's terrible."

The crypto industry may have to wait until 2026 to regain substantial forward momentum.

In 2025, the Trump administration has delivered a series of "gifts" to the cryptocurrency industry. The U.S. Securities and Exchange Commission (SEC) has suspended enforcement actions and investigations into major cryptocurrency exchanges and companies, such as Coinbase, Gemini, Uniswap, OpenSea, and ConsenSys. The White House has also issued an executive order aimed at enhancing U.S. leadership in the digital asset industry and has expressed interest in establishing Bitcoin reserves.

However, these measures have not been sufficient to prevent the recent decline in Bitcoin prices or the overall negative sentiment in the crypto industry. As of this writing, Bitcoin is trading at $84,000, down 18% since Donald Trump's inauguration, 23% from its all-time high, and the total market cap of cryptocurrencies has fallen by 21%.

Where Is the Bottom for Bitcoin in This Cycle?

Kavita Gupta, founder and general partner of Delta Blockchain Fund, said, "It feels like all the good news in the crypto space has happened, and the industry's positive progress seems to be due to the whims of high-level politicians, lacking proper processes and due diligence... The situation could change at any time, and sustainability is questionable."

Currently, the three main forces driving the market downward may push it further before it can regain its footing and begin to recover. In fact, the crypto industry may have to wait until 2026 to see a sustained bull market momentum again.

Internal "Cannibalization"

There are many explanations for the recent decline, starting with the behavior of cryptocurrency participants themselves. For example, the industry has been negatively impacted by multiple meme coin fiascos, such as $MELANIA and later $LIBRA, which even involved Argentine President Javier Milei in a scandal. Now, meme coin issuance and trading activities across the industry are declining, raising questions about their long-term sustainability. For instance, the daily issuance of new tokens reached a local peak of 66,471 on January 24, just six days after the launch of $TRUMP. On February 27, the latest available full data day, this number dropped to 27,741, a decrease of 58%.

Brian Rudick, head of research at GSR, commented on these figures, saying, "People once thought meme coins were the fairest and most effective form of speculation in the crypto space, but $LIBRA showed that this was not the case. Now you see a significant reduction in on-chain trading volumes, and while meme coins are the most affected, this is dragging down the entire crypto space."

Moreover, the $1.5 billion hack on Bybit by North Korean hackers (the largest theft in crypto history) has once again raised questions about the safety of investing in cryptocurrencies. Gupta noted, "These hacking incidents make outsiders think that even after 10 years of development, the industry has not truly matured."

External Headwinds

All of this negative sentiment within the industry is being amplified by a broader reduction in risk appetite among investors. Typically, a new administration would boost consumer confidence, and business leaders initially welcomed Trump's election due to his pro-business stance. However, new data shows that consumer confidence is weakening, possibly due to Trump's threat to impose 25% tariffs on trade partners such as Canada, Mexico, and the EU.

The Conference Board's Consumer Confidence Index reported a third consecutive monthly decline in February, reaching its lowest level since August 2021. The University of Michigan's consumer sentiment survey also showed a significant drop in consumer confidence. The report noted, "Consumer sentiment continued the downward trend seen earlier this month, falling nearly 10% from January. This decline was widespread across age, income, and wealth groups."

The report also mentioned that inflation expectations for the next year rose from 3.3% to 4.3%, the highest level since November 2023, and marked an unusually large increase for the second consecutive month. The current reading is far above the pre-pandemic range of 2.3%-3.0%.

Rudick pointed out, "According to the latest data from the CME FedWatch tool, the market expects two interest rate cuts this year. But if these expectations are completely erased due to tariff issues, traditional markets could fall more than cryptocurrencies."

How Low Could Bitcoin Go?

It is difficult to accurately predict how much lower Bitcoin could fall from here. Steve Sosnick, chief strategist at Interactive Brokers, said that even among commodities, Bitcoin is unique. "You know the supply and demand for crude oil, coffee, or cocoa. Bitcoin doesn't have that kind of intrinsic demand. Its existence is purely for speculative or investment purposes."

However, Sosnick pointed out several technical charts that could provide some guidance for price thresholds investors should watch. One chart is Bitcoin's 200-day simple moving average. At current prices, the asset is approaching its first test of this key indicator since its clear breakout in mid-October last year. If this happens, it means the asset would fall below $80,000, and Sosnick believes the next threshold would be the "high $60,000/low $70,000 range."

Waiting for the Wind: 2026?

Given all these negative forces impacting Bitcoin's price, the crypto industry may have to wait until 2026 for Bitcoin and the entire industry to regain substantial forward momentum. When asked what types of internal or external factors might play a role in this process, the answers are two-fold: strategic Bitcoin reserves or legislation that once and for all sets the rules for the industry.

While the crypto community has long hoped for strategic Bitcoin reserves, the White House's executive order aims to assess something different: a Federal Reserve, where the government would hold bitcoins acquired through law enforcement actions, rather than a strategic reserve, where the government would purchase new bitcoins. (However, many states are assessing their own strategic reserves, though few have made meaningful progress.)

Rudick believes that something like a Bitcoin reserve could be beneficial for the industry, but this is far from guaranteed: "[Reserves] have always seemed unlikely to me, but I do think Bitcoin could easily hit $500,000. Even if we don't get it in the form of a strategic Bitcoin reserve, I do think the U.S. could create a sovereign wealth fund and add Bitcoin."

For Rudick, a more sustainable path to growth is through market structure legislation that allows regulated companies to enter the field legally, but he believes the industry will have to wait until next year for meaningful progress: "[Legislation] might not happen until 2026. But in my view, this is so important because it's what's needed for large-scale institutional entry."

As evidence, he pointed to a recent statement by Bank of America CEO Brian Moynihan, who said that if the rules for the industry became clearer, his crypto-averse bank would consider launching a stablecoin. (At least one source close to Washington negotiations believes that stablecoin legislation could even be signed into law in 2025.)

Until then, the industry needs to remain stable to withstand these headwinds. After all, such dramatic swings in investor sentiment are part of the significant risks of investing in cryptocurrencies.

Sosnick summed up the current market situation in one sentence: "Markets usually climb the stairs on the way up and take the elevator on the way down. Bitcoin this time took the elevator to the top floor and now it's taking the elevator to the basement. It's a highly volatile asset. If volatility is in your favor, that's great—but when it swings the other way, it's terrible."