Bitcoin Plummets to Pre-Trump Election Levels Amidst Industry Turmoil

The Decline of Bitcoin and Its Impact on the Crypto Industry

As of February 5, 2026, Bitcoin's price has dropped below $64,000, representing a staggering 50% decrease from its previous peak last October. This decline has profound implications for the cryptocurrency landscape, which is now facing another slump reminiscent of the crypto winter of 2022.

A leading cryptocurrency exchange is laying off a significant portion of its workforce, while hopes for favorable industry legislation in Congress have faltered. The overall market is bearing the brunt of broader economic trends, and Bitcoin's poor performance has intensified scrutiny of its standing as a legitimate asset class.

The Surge and Subsequent Fall

After President Trump's election in 2024, there was an optimistic projection that the U.S. would establish itself as the 'crypto capital of the planet.' Yet, just weeks later, as market pressures mounted, that narrative has drastically shifted.

“A lot of times it has behaved basically like a tech stock,” said John Todaro, a crypto analyst at Needham. “You have some market participants selling it—going, 'I don't want just another tech exposure.'”

This pattern highlights how vulnerable cryptocurrencies, especially Bitcoin, are to external economic forces. For those who jumped into the crypto market amid speculation and exuberance, the reality check has come harshly.

The Current Crisis

All this has coalesced into what can only be described as one of the industry's deepest crises post-2022. The collapse of FTX left lingering scars, and now we see cuts across major firms and layoffs that echo those dark days. The once vibrant outlook for crypto is now marred by plummeting stock prices of major firms that had heavily invested in Bitcoin.

One notable firm, Strategy, which holds over 700,000 Bitcoins, reported a profound net loss, a staggering $12.4 billion in just the last quarter of 2025, compared to $670.8 million across the same timeframe the prior year.

A Call for Regulation vs. Industry Survival

While the crypto realm has been appealing for regulatory clarity, recent events indicate that such hopes may remain just that—hopes. With legislation aimed at creating a more supportive environment stalled in Congress, the federal government's inaction leaves the industry to navigate these turbulent waters alone.

Moreover, any immediate relief seems unlikely, as Treasury Secretary Scott Bessent indicated in a recent congressional hearing that there are no mechanisms in place to prompt banks to purchase Bitcoin to stabilize its price.

Looking Ahead

The consequences of the downturn extend beyond the plats of cryptocurrency. As firms like Gemini conclude layoffs, there arises a looming concern of a retrenchment akin to the one observed during the crypto market collapse of 2022. The challenges are evident; a prolonged downturn might force many companies to reconsider their future strategies.

Still, amidst the gloom, there are voices suggesting optimism for a more resilient future in crypto, albeit with a critical examination of practices that drove the market madness of recent years. As Evgeny Gaevoy stated, the chase for profits has seemingly overshadowed cryptocurrency's foundational ideals.

This mixed sentiment points to a critical juncture for Bitcoin and crypto at large. Not only must they survive the immediate fallout, but they also need to recalibrate to ensure relevance and sustainability in an ever-evolving economic landscape.