- Bitcoin has dropped 21% since Trump’s inauguration despite institutional buying from MicroStrategy and Tether.
- The “institutions are coming” narrative and Trump’s pro-bitcoin policies haven’t prevented the price decline.
- Bitcoin’s larger market cap ($1.6 trillion) means institutional purchases have less impact on price than in previous years.
Bitcoin has fallen 10% this year with global crypto markets losing half a trillion dollars, challenging the narrative that institutional demand would drive prices higher. Despite major companies like Tether, MicroStrategy, and BlackRock purchasing tens of thousands of bitcoin since January, the cryptocurrency’s price continues its downward trend.
Since President Trump’s January 20th inauguration, when bitcoin reached an all-time high above $108,000, its value has declined by more than 21%. This price drop occurred even as MicroStrategy acquired an additional 78,185 bitcoin and Tether minted over $5 billion worth of USDT while purchasing more than 8,100 bitcoin.
The decline contradicts long-held beliefs in the crypto community that institutional adoption and a pro-bitcoin presidency would boost prices. Trump has fulfilled multiple crypto-friendly promises, signing executive orders to create a Strategic Bitcoin Reserve and establishing a Presidential Working Group to remove “restrictive regulations” hindering bitcoin investment.
Post-Inauguration Crash Despite Positive Developments
The crypto market’s performance appears to follow a “buy the rumor, sell the news” pattern. While some attribute bitcoin’s 21% drop to broader market conditions, with the S&P 500 losing about 8% during the same period, bitcoin’s decline is significantly steeper than traditional markets.
Twitter users have expressed confusion about the price action, with one noting: “HoW dOeS sAyLoR bUy $2 BiLliOn aT 87k AnD wE dRoP tO 81k”
Changed Market Dynamics
According to research by John Griffin and Amin Shams, Tether minting once had a significant impact on bitcoin prices. However, with bitcoin’s current market capitalization exceeding $1.6 trillion and daily trading volume over $29 billion, the impact of institutional purchases has diminished.
The reality appears to be that the marginal capital required to influence Bitcoin’s price has increased substantially compared to previous years. Even with Trump’s children working in bitcoin mining and Commerce Secretary Howard Lutnick’s background as Tether’s asset manager at Cantor Fitzgerald, these developments have not been enough to reverse bitcoin’s downward trend in 2025.
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