Bitcoin plummeted below $63,000 on Thursday, down 50% from an all-time high of over $126,000 in October 2025. As Bitcoin magazine notes, it’s the “largest dollar value drawdown in Bitcoin’s history.” But it’s not just Bitcoin that’s crashing. Ethereum, BNB, Ripple, and just about every other coin of note is down considerably.
It’s a startling crash, especially since so many traders recently had faith that Bitcoin would reach new record highs in 2026. President Donald Trump had promised that he’d be a huge supporter of people who dabble in fake money. And economist Paul Krugman pointed out in a new appearance with Bloomberg News that we can likely credit all the previous crypto pumping of 2025 to faith in Trump. Krugman now thinks there’s a crisis of faith.
“The kind of libertarian ideology that supported Bitcoin doesn’t really apply now that it’s largely a political creation, and it’s sort of, it’s in some ways tied to what you think Trump’s future prospects are, so this is different,” Krugman said, talking about the future.
Crypto is fully mainstream in 2026, and Krugman notes that Bitcoin is almost as old as the iPhone, which was launched in 2007. In all of that time, Bitcoin hasn’t proven itself to have any real utility beyond a speculative asset, which means there’s nothing to really do with it besides bet on whether it’s going up or down. And right now, it’s crashing.
Krugman also mentioned Strategy, formerly known as MicroStrategy, the Michael Saylor company that’s been hoarding Bitcoin like crazy. Strategy reported a net loss of $12.4 billion for the fourth quarter on Thursday, a financial experiment that Bloomberg describes as “coming undone.”
Crypto has become quite a political dividing line in the era of Trump, as the president’s family has reportedly racked up enormous wealth in the industry. The most recent stories have revealed that an investment firm linked to United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan invested $500 million in World Liberty Financial, a run-in party by Trump’s sons.
It’s an unprecedented deal as far as foreign influence over a U.S. president is concerned, and it seems unlikely that anything will be done to hold Trump accountable. That’s perhaps why people who are politically opposed to Trump are rooting for the collapse of Bitcoin and every other cryptocurrency, a kind of prayer to the financial gods that some form of justice or retribution will come for the fascist president.
The Democratic Party poked fun at the crypto crash on X, writing “Yikes,” with a photo of Trump and the headline, “Crypto crash accelerates as investors flee risky assets.”
Yikes pic.twitter.com/dfvbKMSRou
— Democrats (@TheDemocrats) February 5, 2026
But crypto defenders whined that lefties and liberals shouldn’t relish the crypto downturn.
“While Congress is debating legislation that clarifies the regulatory status of crypto assets, protect investors, and accelerate innovation… A political party is ridiculing investors who are experiencing financial losses today. Very, very poor form,” wrote crypto investor Robert Leshner.
But many people haven’t been sympathetic, with one commenter writing “Fuck off. If you voted for this piece of shit, I hope you lost everything.”
It’s hard to sum up the political divide over crypto better than that at the moment.
