The crypto market has weakened recently, and many people are discussing the ripple effects of the U.S. election. Previously, the market was betting on a Trump victory and was optimistic that he would pursue a more lenient crypto regulatory policy after taking office. Bitcoin rode that wave of expectations to a rally, with many investors positioning themselves early.
With the election results in, Trump lost the race, and the expected policy tailwinds failed to materialize. There are market rumors that Trump-linked holdings have begun selling BTC in bulk. The heavy selling pressure has directly triggered a sharp market drop.
Meanwhile, Elon Musk, once dubbed the crypto world’s “hype man,” has quietly deleted a large number of tweets related to cryptocurrency and stopped publicly speaking out in support of Bitcoin and Dogecoin. In the past, a single comment from him could send prices soaring or tumbling. Now that he has chosen to step back in silence, many retail investors have also lost confidence.
Having gained the upper hand, the Democratic Party takes a very different stance toward the crypto industry than the Trump camp. They are not willing to swiftly pass the industry’s eagerly anticipated deregulatory legislation, and instead lean toward tightening oversight, prioritizing investor protection, cracking down on money laundering and the diversion of industry benefits, and giving the SEC broader regulatory powers. They take a cautious view of the deregulatory bills the industry had previously pinned high hopes on, and no crypto-friendly easing measures are likely in the short term.
They have even signaled that they will closely scrutinize crypto assets linked to Trump and related conflicts of interest, further curbing the market’s room for optimism.
With multiple negative factors piling up, market sentiment quickly turned cold. Speculative funds that had flowed in on expectations surrounding the election saw little chance of those hopes being fulfilled and chose to exit and seek safety. BTC came under pressure and fell, while altcoins weakened across the board.
Many retail investors may wonder whether this means the bull run is completely over. In essence, expectations are simply fading. The previous rally was a bet on policy dividends; now that those expectations have evaporated, whales are fleeing, leading industry figures are no longer lending their support, and the Democrats’ stricter regulatory direction is adding to the pressure. Naturally, investors are prioritizing taking profits and securing their gains.
In the short term, market sentiment remains weak, and it will take time for the selling pressure to be absorbed.
