Trump-Fueled Crypto Boom Fizzles In Brutal Year For Retail Traders

Joaquin Morales didn’t think Bitcoin would keep dropping. 

The largest cryptocurrency had just hit a record high of $126,000 for the first time ever, the sort of move enthusiasts had been banking on after President Donald Trump’s reelection. For months, analysts had been predicting a bull run lasting for years, fueled by an administration that championed digital assets.  

That’s why the 21-year-old decided to buy the dip when Bitcoin’s price moved lower in early fall. A few days later, when it fell again, he snapped up more. And then even more during the next drop. But the token just kept spiraling down. 

“I caught the falling knife like five times,” said Morales, an undergraduate at IE University in Madrid. He has one word to describe this year in cryptocurrency: traicionero, which translates in English to “treacherous.” 

Retail traders around the world are contending with similar realities as 2025 draws to a close. The year started with high hopes for crypto, boosted by looser regulations, lower interest rates and buy-in from big financial institutions. It’s ending with Bitcoin down some 10% from last December, and billions of dollars in bets wiped out after roughly $1 trillion was knocked off the combined market value of all cryptocurrencies.

“The combination of a crypto-embracing administration alongside a range of stock-market methods for gaining exposure made it quite easy for momentum-loving investors to pile into cryptocurrencies,” said Steve Sosnick, chief strategist at Interactive Brokers. “The crypto flash crash on Oct. 10 was a very unpleasant wake-up call.”

The brutal turnaround is forcing traders to reevaluate their strategies as they prepare for 2026. Some are remembering the worst moments of 2022, after the collapse of exchange FTX led to a “crypto winter.” 

Others are pushing back on the idea that the market is headed for such a rocky stretch. They say crypto has irreversibly entered the mainstream: Retail-friendly ETFs make the market more accessible to everyday investors, while the entry of institutional players has created more stability. Regardless, as the year heads to a close, traders are revamping their approaches. 

Divergent Strategies 

Filip Szymkowiak looks more toward altcoins. The 28-year-old from Poznan, Poland, has backed tokens such as Sensei, a “deflationary memecoin,” and DEAI, a coin for a “decentralized artificial intelligence ecosystem,” and saw his portfolio tumble some 35% this year. Still, he said he wants to stay with smaller tokens because that’s where he sees more innovation and potential for big returns.

Szymkowiak said he aims to filter out the noise from useful information.

“There’s a lot of crap online, 99% of things you see, it’s slop,” he said. “For me, I believe that the space is maturing, and with that comes putting the hype aside and the market being driven on utility and real infrastructure.”

“Among retail investors, we’ve seen sort of this bimodal market,” said Stephen Sikes, chief operating officer of the trading platform Public. He sees an emerging spit between “blue-chip” assets like Bitcoin and smaller altcoins, describing it as a “bimodal market” among retail investors. 

On the other side of the split is the longer-term approach of Jose Esteban Arrapalo, who avoids altcoins. The 36-year-old loan officer from Hollywood, Florida, missed out on the big rallies that Bitcoin posted before October, so in late November, when the token was hitting lows around $85,000, he bought $10,000 worth. At least so far, his timing worked out — that purchase was near Bitcoin’s lowest price this year.

“I believe in the asset long term,” Arrapalo said. “I do believe that within next three quarters, it will reach back to its numbers of greater than $110,000.”

He plans to sit on his investment for much longer than that, viewing Bitcoin as akin to a 401(k). About 80% of his portfolio is in rental properties, 15% in crypto and 5% in retirement accounts. 

Morales in Madrid also aims to be more patient in the year ahead by riding out short-term gyrations.

“I learned how volatile the market is,” he said. “It made me much more conscious not to overreact to every swing.”