A Minute After the Market Opens – 50% Plunge: An Inside Look at Trump’s Crypto Crash That No One Saw Coming

The crash on Tuesday of the crypto-mining company American Bitcoin Corp. was lightning-fast. Just one minute after Wall Street opened at 9:31 a.m., its shares had already dropped 33%. Five minutes later, the decline reached 42%, and shortly after that—even briefly—exceeded 50%.

The drop was so dramatic that the company quickly became a symbol of the broader cryptocurrency market collapse at the end of 2025, as well as the failure of numerous crypto projects linked to the Trump family over the past year. While the overall crypto market has fallen about 25% in the past two months, the initiatives backed by the family have collapsed far more severely.

World Liberty Financial, co-founded by Donald Trump and his sons, saw the WLFI token price fall 51% from its peak in early September—far more than the decline in Bitcoin or other smaller digital tokens. Alt5 Sigma, another company linked to Trump’s sons, has lost about 75% of its value and is now facing increasing legal issues.

Then there are the meme coins named after the president and his wife Melania—they have collapsed approximately 90% and 99% from their January highs, respectively. Meanwhile, American Bitcoin, co-founded by Eric Trump, is already down about 75% after Tuesday’s heavy plunge.

These moves seriously damaged the massive piles of crypto wealth that the First Family had accumulated earlier in the year. But they also carry broader implications for both the digital asset industry and the president’s public image. Trump’s backing helped boost a wide range of crypto tokens during the early months of his second term and made Bitcoin’s price a marker of his political success.

Now, however, what once seemed like a Trump premium has suddenly become a Trump brake, removing one of the central pillars supporting crypto assets and signaling how quickly confidence in these speculative markets—and even in the president himself—can evaporate. “The Trump presidency is a double-edged sword for legitimacy,” said Hillary Allen, a law professor at Washington College of Law at American University. “Trump started launching his own crypto projects, many of which lost value very quickly. If the goal was to achieve legitimacy through the Trump family, it didn’t help.” World Liberty Financial and the company behind the Trump meme coin did not immediately respond to requests for comment.

Although the president has recently toned down his public promotion of cryptocurrencies, Eric Trump used social media on Tuesday to blame the poor performance of American Bitcoin on the end of the stock lock-up period, rather than any broader weakness.

“Our fundamentals are practically unmatched,” he wrote in an X post. “I’m 100% committed to leading the industry.”

To be clear, the dramatic moves in Trump-related assets are hardly new for an industry defined by volatility. Digital tokens have experienced major drops in the past before bouncing back. On Tuesday, while American Bitcoin struggled, the original cryptocurrency had one of its best days in recent weeks, rising about 6%.

Earlier this year, however, it seemed that Trump’s adoption of the technology might be enough to lift digital tokens out of their endless boom-and-bust cycle and make them a more reliable part of the financial system. Many crypto believers thought Trump would have enough influence to ensure the success of the projects he cared about most.

For a time, various cross-promotions seemed to work. People wanting to show support for the president were buying Trump tokens, boosting their value. Gryphon Digital shares jumped 173% when the company announced a merger with Eric Trump’s American Bitcoin in May. On the first trading day after the merger in September, American Bitcoin’s shares rose another 16%. These projects were supported by policies and regulatory changes promoted by Trump, including legislation aimed at making crypto stablecoins—tied to the dollar—popular.

But signs of trouble increased over time. Meme coins released just before his inauguration, heavily promoted by Trump himself, gradually lost momentum, with only occasional rallies, such as in April when the president suggested joining some of the biggest coin holders for dinner. Joel Lee, CEO of an online electric vehicle marketplace, bought the meme coin to attend the dinner but soon sold it. He noted that things worsened, especially after Trump imposed a new round of tariffs on China in October. “People started realizing it might not be what they thought,” Lee said. Michael Terpin, a longtime crypto investor, added that the tariff moves served as a cold reminder: “Trump gives, and Trump takes.”

The problems, however, go beyond broader market whims. American Bitcoin had to deal with a report that the Chinese-made mining machines it uses were being investigated as a U.S. national security risk. Meanwhile, Alt5 Sigma, a public company that purchased one of the tokens issued by World Liberty Financial, faced mass executive departures after announcing that one of its subsidiaries was under criminal investigation in Rwanda. Alt5 Sigma did not respond to requests for comment regarding the latest developments.

The downward trend since October has erased over $1 billion of the wealth the Trump family generated through their crypto ventures and other businesses. But they still hold significant gains, according to Bloomberg’s Billionaires Index. Retail investors who bought assets near their peaks are bearing the brunt of the losses. Kevin Hu, a 22-year-old student in Vancouver, had positioned himself for a continued rally, but instead his digital token portfolio fell by up to 40% by mid-November.

“You’d think that if the president is so pro-crypto, that would create a floor,” he said. “But the market didn’t react that way. And the whole meme coin situation just pushed a lot of people away.”