Here’s How Much BTC, ETH, XRP Have Dumped Since ‘Crypto President’ Trump Took Office

During his 2024 presidential campaign, Trump made a notable pivot towards the crypto industry. He attended a prominent Bitcoin conference, expressed support for the asset class, and even, reportedly, used Bitcoin for a transaction. His promises included fostering a national Bitcoin strategy reserve and ensuring all remaining Bitcoin mining occurred within the United States. These declarations resonated with a crypto community unaccustomed to such high-level political endorsement, leading to considerable financial backing for his campaign from industry figures.

Following his election win, the market initially saw a period of intense hype and price appreciation for many digital assets. Despite a 'mid-year drop' and a 'Liberation Day fiasco', some cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and XRP, reached new all-time highs by October. However, this bullish momentum proved short-lived. A major market liquidation event in early October marked the beginning of a sustained downward trend.

The market decline has been stark. Bitcoin's price recently fell to $59,000, its lowest point since before the elections. Looking specifically at the period since Trump's inauguration, the picture is even more sobering for many key assets. Bitcoin has dropped by 44%, Ethereum by 49%, and XRP by a significant 68%. Other prominent altcoins have suffered even steeper losses, with Solana down 77%, Dogecoin 79%, Avalanche 82%, Cardano 85%, Sui 86%, Aptos 93%, and even Trump-themed meme coins experiencing devastating declines of 97.7% and 99.5% for TRUMP and MELANIA respectively.

Why it matters for Australian investors

While the market movements are driven by global factors, particularly those emanating from the US, they have a direct and often amplified impact on Australian investors. The interconnected nature of the global cryptocurrency market means that significant price dumps in major assets like BTC and ETH are immediately reflected on Australian exchanges such as CoinSpot, Independent Reserve, Swyftx, and BTC Markets. This translates directly to the AUD value of Australian investors' portfolios.

For Australian investors, understanding these macro trends is crucial for risk management and portfolio allocation. The highly vocal 'crypto president' narrative from the US created considerable anticipation, and its failure to deliver sustained positive market performance highlights the inherent volatility and speculative nature of digital assets. Australian investors must remain aware that political rhetoric, while influential, does not guarantee market outcomes.

Furthermore, the tax implications for Australian investors remain constant regardless of market performance. The Australian Taxation Office (ATO) treats cryptocurrency as property for capital gains tax purposes. Significant price drops mean that any sales, even at a loss, must be accurately reported. Conversely, if an investment is held through a downturn, the unrealised losses might not be immediately deductible but will impact future capital gains calculations upon sale.

The regulatory environment in Australia, overseen by bodies like ASIC and AUSTRAC, aims to provide a degree of consumer protection and combat illicit financial activity. However, these local safeguards do not insulate Australian investors from global market fluctuations or the consequences of international political sentiment. Remaining informed about these global narratives is therefore a key part of responsible crypto investing in Australia.

Impact on the AUD market

The pronounced declines in major cryptocurrencies directly affect the AUD value of holdings for Australian investors. When Bitcoin, Ethereum, or XRP tumble by double-digit percentages in US dollar terms, their equivalent values on Australian platforms like those mentioned earlier follow suit. This can lead to rapid depreciation of Australian dollar-denominated crypto portfolios.

For example, a 44% drop in BTC's USD price translates to a near-identical percentage drop in its AUD price, assuming a stable AUD/USD exchange rate. This can trigger significant unrealised losses for investors who bought at higher price points. The swiftness of these movements often outpaces traditional financial markets, demanding heightened vigilance from Australian participants.

Moreover, the market's reaction to such downturns can influence trading volumes on Australian exchanges. Faced with steep losses, some investors may choose to sell, increasing market liquidity but also potentially driving prices down further. Others might enter with a 'buy the dip' strategy, hoping for a rebound, which can also contribute to volume fluctuations.

While Australia has a robust and evolving regulatory framework for cryptocurrencies, including AUSTRAC's oversight on anti-money laundering and counter-terrorism financing, and ASIC's role in market conduct, these measures do not provide a buffer against global price depreciation. The AUD market for cryptocurrencies is inextricably linked to the broader international market, meaning Australian investors bear the full brunt of these global shifts in sentiment and value.

What to watch next

Moving forward, Australian investors should closely monitor several key indicators. The ongoing performance of major cryptocurrencies like BTC and ETH against the US dollar will continue to be the primary driver of their AUD value. Any further significant downward movements in these assets could signal a prolonged bear market, impacting sentiment and investment strategies within Australia.

Attention should also be paid to political developments in the US, particularly any further statements or actions from the 'crypto president' regarding digital asset regulation or endorsement. While past promises haven't stemmed recent declines, future policy shifts could still influence investor confidence globally and, consequently, in Australia. The perceived strength of the US regulatory stance, whether supportive or restrictive, often sets a precedent.

Beyond US politics, global macroeconomic factors, such as inflation, interest rate decisions by central banks (including the RBA), and broader economic stability, will continue to play a crucial role. These traditional economic indicators can influence investor appetite for risk assets like cryptocurrency, affecting capital flows both into and out of the Australian crypto market.

Finally, keeping an eye on on-chain metrics for major cryptocurrencies, such as network activity, transaction volumes, and stablecoin flows, can offer insights into underlying market health and potential future price movements. Combined with vigilance over major global news and local regulatory shifts from ASIC and AUSTRAC, Australian investors can better navigate the evolving and often turbulent cryptocurrency landscape.