When President Donald Trump began his second term, a wave of strong optimism swept across parts of the crypto industry.
This was a President who went from calling Bitcoin (BTC) a "scam" to later embracing digital assets, even launching his own nonfungible token collection.
His second term pushed forward several pro-crypto measures. From signing the GENIUS Act and issuing high-profile pardons that drew attention from the digital asset community.
But according to Nobel Prize-winning economist Paul Krugman, Trump's political influence may also be contributing to recent volatility in the crypto market — particularly for Bitcoin (BTC).
Related: Trump eases tensions, says China tariffs will be 'nowhere near' 145%
Bitcoin reacts to policy concerns and political headlines
Bitcoin has struggled over the past two months after starting October with strong momentum.
BTC briefly reached $126,000 at the beginning of the month, raising hopes for a steady final quarter of the year.
Then came the post on Truth Social.
Market sentiment shifted sharply on Oct. 10, when Trump posted that he planned to impose 100% tariffs on Chinese imports in addition to existing duties.
The remark fueled a swift risk-off reaction across global markets.
Cryptocurrencies fell sharply, with the broader market shedding more than $19 billion within hours.
Major assets, including BTC and Ethereum (ETH), experienced steep intraday declines as traders repositioned around heightened geopolitical and trade-related uncertainty.
Although Trump reversed his proposed plans, the market sentiments did not follow suit.
Krugman blames 'Trumpism' for Bitcoin price crash
In a Substack column titled "The Trump Trade is Unraveling," Krugman argued that Bitcoin's recent price action is increasingly tied to shifting expectations around Trump's political strength heading into the next election cycle.
Krugman wrote that Trump's weakening polling numbers — rather than tariffs alone — may be weighing on BTC, given that the former president has campaigned on supporting the digital asset sector.
"Trump's power is visibly diminishing, so the price of Bitcoin, which has in effect become a bet on Trumpism, has plunged,"he said.
The economist further argued that the correlation exists because crypto-aligned donors and firms have backed Trump, and his administration has reciprocated with favorable policy gestures.
"A weakened Trump is less able to work his will on all fronts, including his efforts to promote crypto,"he wrote.
"Bitcoin has become a Trump trade, and Bitcoin's declining price is an indicator of Trump's declining dominance over the G.O.P."
According to recent data from The Economist , Trump's net approval rating stands at -19%, with 38% approving and 57% disapproving.
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Bitcoin's path forward
BTC dipped into the $82,000 range in mid-November during the broader pullback.
However, the asset has shown signs of stabilization in recent days, reflecting improving risk appetite and a partial recovery in market sentiment.
At press time, Bitcoin was down 0.03% over the past 24 hours, trading at $91,297.45, as per CoinGecko.
This story was originally published by TheStreet on Nov 28, 2025, where it first appeared in the Trading News & Analysis section. Add TheStreet as a Preferred Source by clicking here.
