Trump Promised a Crypto Revolution — Now Bitcoin Investors Have Lost Half Their Money in 4 Months

A $500 million (£367.45 million) Abu Dhabi deal, leveraged bets gone wrong, and a Treasury secretary who just said 'no' to a bailout.

It wasn't supposed to go this way.

Donald Trump won re-election vowing to make America 'the crypto capital of the world.' He appointed industry-friendly regulators, signed the country's first major crypto legislation, and watched Bitcoin soar to nearly $126,000 (£92,600) per coin in October 2025.

Then, in just four months, everything unraveled.

Bitcoin crashed to around $60,000 (£44,100) this week, erasing all gains made since Trump's November 2024 victory. For millions who bought in on the back of a presidential promise, the losses aren't just numbers—they're life-changing.

Borrowed Money, Broken Bets

The rally Trump inspired didn't just attract investors. It attracted gamblers.

According to NPR, the post-election excitement pushed traders to borrow heavily to buy even more crypto, a strategy called leveraged trading. When prices climbed, it worked beautifully. When Trump threatened a 100% tariff on Chinese imports on 10 October, traders panicked and started selling. Leverage turned a dip into a disaster.

Prices dropped. Brokerages automatically closed leveraged positions. Those forced sales dragged prices lower, triggering still more liquidations. According to Coinglass data, more than $2 billion (£1.5 billion) in crypto positions were wiped out in a single week. Notable investor Michael Burry, who predicted the 2008 financial crash, warned that a continued decline could 'set in motion a death spiral leading to massive value destruction.'

Ben Schiffrin, senior policy director at consumer advocacy group Better Markets, didn't mince words. 'Bitcoin is anything but safe,' he told NPR. 'It's the most speculative asset, and I think people are realising that.'

It's a familiar script. In 2022, the FTX collapse sent Bitcoin from $50,000 (£36,700) to under $20,000 (£14,700). Before that, the 2018 initial coin offering craze ended in a similar crash. The boom-and-bust pattern is baked into crypto's DNA. But this time, the boom came with a presidential seal of approval.

The $500 Million Deal Under Investigation

While retail investors bled money, a different story was taking shape behind closed doors.

The Wall Street Journal reported that four days before Trump's January 2025 inauguration, two lieutenants of Abu Dhabi royal Sheikh Tahnoon bin Zayed Al Nahyan signed a contract to purchase a 49% stake in World Liberty Financial for $500 million (£368 million). The crypto venture is co-founded by Trump's sons and the family of Middle East envoy Steve Witkoff.

According to ABC News, approximately $187 million (£137 million) went directly to Trump family entities, with at least $31 million (£23 million) flowing to Witkoff-linked companies. Ethics experts told reporters that a foreign government official secretly funnelling hundreds of millions to a company partly owned by the sitting president has no known precedent.

Congressman Ro Khanna has since launched a formal investigation. In a letter to World Liberty Financial's chief executive, Khanna wrote that the arrangements 'may even represent a violation of multiple laws and the United States Constitution.'

A spokesperson for World Liberty Financial called the deal a routine business decision and denied any link to the administration's subsequent approval of AI chip exports to the UAE.

Washington Won't Save You

If anyone was hoping the government might step in, Treasury Secretary Scott Bessent shut that down during testimony before the House Financial Services Committee last week.

Asked whether the Treasury had authority to buy Bitcoin or support the market, Bessent was blunt: 'I do not have the authority to do that, and as chair of FSOC, I do not have that authority.'

Bitcoin dropped below $67,000 (£49,200) within hours of his remarks, Yahoo Finance reported. According to CryptoQuant, US exchange-traded funds, which purchased 46,000 Bitcoin in early 2025, have turned net sellers this year. Digital asset investment products saw $1.7 billion (£1.2 billion) in outflows in a single week.

A Regulation Bill Going Nowhere

The legislative outlook isn't much better. The Digital Asset Market CLARITY Act, a sweeping bill meant to set federal rules for the crypto industry, passed the House last summer but has stalled in the Senate. The sticking point: Democrats want ethics provisions barring senior government officials, including the president, from profiting personally from crypto ventures. An ethics amendment failed along party lines during committee proceedings.

The Senate Banking Committee postponed its markup indefinitely. The Senate Agriculture Committee advanced its own version of the bill on 29 January, but without bipartisan support, it faces steep odds on the Senate floor.

For investors who were told that friendly regulation would protect them, the silence speaks volumes.

What It Means for Your Money

The collision of reckless speculation, political conflicts, and regulatory gridlock has left crypto holders exposed. People who bought Bitcoin with retirement savings or borrowed money during the Trump-era rally are now staring at real-world fallout: drained college funds, empty nest eggs, and margin calls demanding immediate cash.

Bitcoin has survived brutal crashes before. It might recover again. But 10X Research strategists captured the current mood: 'In the absence of a clear catalyst, there is little urgency to step in.'

Trump promised a revolution. What investors got was a reminder: in crypto, you're on your own.