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Bitcoin News Update: Bitcoin's Plunge Signals Trump's Diminishing Influence, as Crypto Connections Weaken Amid MAGA's Downturn

Bitcoin News Update: Bitcoin's Plunge Signals Trump's Diminishing Influence, as Crypto Connections Weaken Amid MAGA's Downturn

Bitget-RWA2025/11/26 20:00
By:Bitget-RWA

- Nobel laureate Paul Krugman links Bitcoin's $1 trillion crash to Trump's waning political influence and crypto-linked wealth decline. - Trump family's crypto assets lost $1 billion in value, with Eric Trump's ABTC shares down 50% and memecoins losing 90% of peak value. - Despite losses, complex financial structures like Alt5 Sigma holdings buffer the family, while Krugman ties crypto turmoil to fractured MAGA support. - Trump's pro-crypto policies face scrutiny as Bitcoin's $40k drop undermines his econo

The

crash has become a key indicator of what Nobel Prize winner Paul Krugman refers to as the collapse of the "Trump trade." The sharp decline in cryptocurrency values has paralleled a decrease in Donald Trump’s political clout and the fortunes of his family, which are tied to crypto. In a recent Substack article, Krugman described the $1 trillion drop in digital assets as a sign of fading faith in Trumpism, suggesting that the crypto market’s steep fall reflects Trump’s loosening hold over the Republican Party and the economic strategies he once promoted .

The Trump family's involvement in crypto has made them especially susceptible to the downturn. Their net worth, which

at its highest in early September, has dropped to $6.7 billion, Bloomberg Billionaires Index reports, with most losses stemming from unstable crypto holdings. Eric Trump’s investment in Corp. (ABTC) has lost more than half its value since its peak, and the Trump-branded memecoin—launched at the presidential inauguration—has plummeted by about 90% since its January high. Shares of & Technology Group, which had amassed large amounts of Bitcoin and other cryptocurrencies, have also fallen to historic lows .

Bitcoin News Update: Bitcoin's Plunge Signals Trump's Diminishing Influence, as Crypto Connections Weaken Amid MAGA's Downturn image 0
Despite these setbacks, the Trump family still has a cushion thanks to intricate financial arrangements. For instance, their main crypto venture, , has seen its token lose close to 50% of its value, but the family continues to earn from token sales and holds a stake in Alt5 Sigma, a public company that acquired WLFI tokens at a reduced price. "The Trumps not only invest in tokens, but also create and sell them, profiting from these deals," , pointing out the difference between regular investors and the Trump family's crypto operations.

Eric Trump has remained optimistic, calling Bitcoin "the greatest asset of our time" at a Yahoo Finance event, even as American Bitcoin’s stock has fallen 30% since its Nasdaq launch in September. The company, which mines Bitcoin in West Texas at half the average market cost,

, though its $4 billion market cap is still unstable. At the same time, the Trump family’s assets have increased in value due to token vesting, despite mounting paper losses.

Krugman’s commentary connects the crypto downturn to larger political shifts. Trump’s approval rating has

, the lowest in his second term, as bipartisan moves like releasing the Jeffrey Epstein files and reversing Trump-era tariffs show cracks in the MAGA coalition. The Nobel laureate contends that Trump’s weakening influence has had a direct impact on the crypto industry, which once flourished under his supportive stance, including pardoning Binance founder Changpeng Zhao and backing Bitcoin ETFs. "With Trump’s power diminished, his ability to push crypto forward is also reduced," .

The recent chaos in the crypto sector has also highlighted weaknesses in Trump’s economic policies. Treasury Secretary Scott Bessent

, not tariffs—a view consistent with Trump’s approach—while downplaying the threat of recession, even after a 43-day government shutdown caused $11 billion in economic losses. Still, as Bitcoin’s value has dropped from a high of $126,000 to about $87,000, the administration’s crypto-friendly policies have not been able to steady the market, .

As the Trump family deals with their crypto setbacks, the political consequences are evident: a market once lifted by Trump’s backing is now suffering from his waning influence. Whether this marks a deeper change in the GOP or is simply part of the crypto cycle is unclear, but Krugman’s assessment of the "Trump trade" coming undone highlights a crucial turning point in both the financial and political arenas.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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