Crypto apocalypse: Time to get real about these pseudo assets

Digital tokens have had the US administration’s favour but this industry's demands would put the banking sector at threat

- NOURIEL ROUBINI

A year ago, the most pro-crypto president in US history had just returned to power after pandering to clueless retail crypto investors and receiving massive financial backing from semi-corrupt crypto insiders.

Donald Trump's second coming was supposed to be a new dawn for crypto, leading various self-dealing evangelists to predict that Bitcoin would become ‘digital gold’, reaching at least $200,000 by the end of 2025. As promised, Trump did gut most crypto regulations. He also signed the Guiding and Establishing National Innovation for US Stable Coins (Genius) Act, pushed for the Digital Asset Market Clarity Act, profited personally from shady domestic and foreign crypto deals, promoted his own meme coin, pardoned crypto crooks who had allegedly aided terror organizations and hosted private dinners for crypto insiders at the White House.

Moreover, crypto was supposed to benefit from various macro and geopolitical risks, such as the ballooning of US and other advanced economies’ debt and deficits, the debasement of the dollar and other fiat currencies, new trade wars and growing tensions between the US and Iran, China and others. Indeed, the heightened risk environment helps explain why gold rose by over 60% in 2025.

But ‘digital gold’ fell by 6% in 2025. As of now, Bitcoin is down 35% from its October peak, below where it was when Trump was elected, and the $Trump and $Melania meme coins are down 95%. Every time gold has spiked in response to trade or geopolitical ructions over the past year, Bitcoin has fallen sharply. Far from being a hedge, it is a way to leverage risk, showing a strong correlation with other risky assets like speculative stocks.