Why Crypto Fell to 20% of Biden-Era Levels Despite Trump’s Return in 2025

The total cryptocurrency market capitalization, which peaked at roughly five times current levels during the Biden administration, remains near 20% of that high despite former President Donald Trump’s return to office in 2025. This divergence highlights a fundamental shift in market dynamics from the retail-driven, speculative environment of the Trump years to a more regulated, institutionally focused crypto ecosystem under Biden. Understanding this transition is crucial for assessing the future trajectory of crypto markets amid evolving regulatory and macroeconomic conditions.

What happened

During the Biden administration, the cryptocurrency market experienced unprecedented growth, with total market capitalization reaching levels approximately five times higher than those recorded in early 2025. This surge coincided with a notable increase in regulatory activity, including enhanced enforcement actions by the U.S. Securities and Exchange Commission (SEC), clearer regulatory frameworks, and legislative proposals aimed at comprehensive crypto oversight. Official SEC statements and Congressional Research Service reports document these regulatory developments as part of an effort to bring greater clarity and investor protection to the sector.

Simultaneously, institutional participation in crypto expanded significantly. Major asset managers launched crypto exchange-traded funds (ETFs) and institutional custody solutions, as evidenced by filings from firms such as ProShares and Valkyrie. This institutionalization marked a shift away from the retail-driven trading that had characterized much of the Trump administration’s crypto market years (2016–2020). Chainalysis data from 2023 confirms a relative decline in retail trading volumes compared to institutional activity during the Biden period.

Despite former President Trump’s return to office in 2025, crypto market valuations have remained subdued, hovering at about 20% of their Biden-era peak. This persistence of lower valuations suggests that political leadership alone is not the primary driver of crypto prices. Rather, the combination of regulatory oversight and institutional market structures appears to exert a stronger influence on market behavior. BeinCrypto and Chainalysis analyses interpret this as a fundamental change in market dynamics, where regulatory clarity attracts institutional investors but potentially dampens speculative retail-driven price spikes.

Why this matters

The evolution from a largely speculative, retail-dominated crypto market under Trump to a more regulated and institutionalized environment under Biden carries significant implications for the asset class’s future. Regulatory clarity has likely increased compliance costs and curtailed certain speculative activities, contributing to a "cooling" effect on prices despite political shifts. This suggests that structural factors—such as enforcement actions, regulatory frameworks, and institutional adoption—are now more determinative of crypto valuations than political leadership or sentiment alone.

This transition could signify a maturing market moving toward integration with traditional financial systems, potentially enhancing stability and investor protection but also limiting the rapid price appreciation driven by retail speculation. The shift also underscores the growing importance of regulatory policy in shaping crypto markets, highlighting the role of government agencies in influencing asset class development beyond electoral cycles.

What remains unclear

While the broad contours of regulatory impact and institutionalization are documented, several key questions remain unresolved. It is unclear to what extent the current subdued valuation represents a permanent structural transformation versus a temporary repricing influenced by broader macroeconomic headwinds, such as interest rate increases and inflationary pressures. The complex interplay between these factors and regulatory effects has not been fully disentangled in available data.

Furthermore, granular data on institutional versus retail trading volumes post-2023 is limited, restricting insight into the precise market composition and behavior. Metrics such as institutional holdings, retail wallet activity, and ETF inflows or outflows that might clarify whether the market is undergoing structural change or cyclical adjustment are not comprehensively available. Additionally, the impact of global regulatory developments outside the U.S. and their interaction with U.S. policies on market dynamics remains insufficiently explored.

Finally, existing sources do not provide direct causal evidence linking political leadership changes—specifically Trump’s return—to shifts in crypto market valuations. Observed correlations do not establish causality, leaving open questions about the relative influence of political versus structural and macroeconomic factors.

What to watch next

Regulatory developments and enforcement actions by the SEC and other U.S. agencies, including potential new legislation affecting crypto market structure and investor protections.
Institutional investor behavior, as indicated by ETF filings, approvals, inflows/outflows, and data on custody arrangements, to assess the depth and durability of institutional adoption.
Retail participation trends, measured through wallet activity and trading volumes, to evaluate whether retail investors are returning or continuing to cede market share to institutions.
Macro-financial indicators such as interest rates and inflation trajectories, which may influence crypto valuations independently or interactively with regulatory factors.
Global regulatory actions and coordination efforts that could affect U.S. market dynamics and the broader international crypto ecosystem.

The crypto market’s decline to 20% of Biden-era highs despite Trump’s political comeback reflects a complex shift driven by regulatory frameworks and institutionalization rather than political leadership alone. While this points toward a structural transformation, incomplete data and overlapping macroeconomic forces mean the precise nature and permanence of this shift remain uncertain. Ongoing regulatory decisions, institutional engagement, and market data will be critical to understanding whether crypto is entering a new phase of maturity or undergoing cyclical repricing.

Source: https://beincrypto.com/trumps-return-crypto-2025-below-biden-era-highs/. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.