The Trump-Pump-Dump Trifecta is Complete ⛳
Hello y'all. Happy Saturday.
Less than 24 hours after the dust has settled around US President Donald Trump's much-anticipated crypto summit, a sobering reality has emerged.
We have been tracking the market movement closely for the past few months and wanted to share our observation along with a few charts in this week’s Wormhole.
The euphoria that carried markets to dizzying heights after the 2024 US Presidential Elections has all but vanished.
Bitcoin's descent from its January peak mirrors a broader market retreat. The "Trump Trade" that dominated investment strategies for months has reversed with startling speed, leaving the S&P 500 and Nasdaq Composite indices back where they started before the election ballots were even counted.
The much-celebrated US Bitcoin spot exchange-traded funds (ETFs)? Well - we will let you judge: only 2 out of the last 19 trading days saw net inflows - which barely aggregated $150 million.
The question on everyone's mind? How did we transition from champagne toasts to market despair in just four months? And more importantly, what does the completion of this "Trump-Pump-Dump" trifecta tell us about what lies ahead?
In this week's Wormhole, we dissect the full cycle – from Trump's pre-election crypto promises through the post-victory market surge, to the sobering reality check we're currently experiencing.
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The Trump Phase: Building the Narrative
It's easy to forget how dramatically Trump's stance on crypto evolved heading into the 2024 election.
From dismissing Bitcoin as "based on thin air" during his first term to declaring at the Bitcoin 2024 Conference that he would create a "strategic Bitcoin reserve," Trump's pivot was calculated – and effective.
The "Trump trade" narrative crystallised: a Trump victory would mean friendly regulations, supportive policies, and government legitimisation of crypto. Markets responded accordingly.
By Election Day on November 5, 2024
Bitcoin had surged more than 60% YTD to $69,374
The S&P 500 had climbed 25% to ~5,782
The tech-heavy NASDAQ had soared 23% to ~18,439
Investors were positioning themselves for what many called the "most crypto-friendly administration in history."
The Trump pump, which was yet to come, did not disappoint.
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The Pump Phase: Post-Election Euphoria
When Trump clinched his second term, markets went vertical. The rise of interest and flow of funds into crypto were unprecedented.
Within seven days of the election, Bitcoin rocketed to $89,000. By early December, it shattered the psychological $100,000 barrier. The elusive six-figure Bitcoin had finally arrived, peaking at $109,000 in January 2025 – a mind-boggling 50%+ surge in just ten weeks.
Read: 5,815 Days 💯
Traditional markets enjoyed their own post-election honeymoon:
The S&P 500 climbed to ~6,050 (a 5-7% post-election pop)
The NASDAQ reached ~19,500 (6-8% higher)
In a market defined by excess, nothing stood out more than Dogecoin's astonishing 153% post-election surge to $0.43 – seemingly for no reason beyond Trump’s endorsement of the Department of Government Efficiency (DOGE) and memecoin enthusiasm.
Read: The DOGE Rises 🐶
As Bitcoin approached its inauguration day peak in January, market commentary shifted from optimistic to euphoric.
The market had never been more confident. And that, as seasoned investors know, is precisely when things tend to unravel.
The Dump Phase: Expectation Meets Reality
The descent began gradually, then accelerated – a classic blow-off top pattern.
Bitcoin gave back 14% from its peak, settling into the mid-$90,000s. Ethereum suffered worse, down 21% from its high. And Dogecoin, true to form, crashed hardest – plummeting 42%.
The most painful moment came on March 7, 2025, ironically when Trump finally signed his long-promised Strategic Bitcoin Reserve executive order.
Markets, which had been anticipating a massive government Bitcoin buying programme, reacted with sharp disappointment to the reality: the order merely committed to "never sell" the government's existing 198,109 Bitcoin from criminal seizures. No new purchases. No ten-figure budget allocation.
The immediate reaction was brutal. Bitcoin plunged 6% in hours, dragging everything from Ethereum to Solana along with it.
The disappointment rippled beyond crypto. Major US indices have now surrendered their post-election gains.
S&P 500 down to 5,770 from its peak of ~6,050
NASDAQ retreating to 18,196 from ~19,500
Although Bitcoin has not gone back to the pre-election price range, it went as low as $78,400 — less than 10% away from the pre-election all-time high of $73,712.
Today, Bitcoin has retained merely 22% of the 50%+ jump it registered during the peak phase post Trump’s re-election.
Bitcoin Spot ETFs also faced the pump and dump.
While an aggregate of $22 billion came in through daily inflows after Trump’s re-election as of March 7, more than a total of $10 billion were pulled out in daily outflows during the same duration.
In fact, the top 8 of the largest single day net outflows since the inception of ETFs came after November 5, 2024.
The Anatomy of a Crash
Why did the Trump-Pump-Dump trifecta complete so rapidly?
The answer is at the intersection of three powerful forces.
First, expectations became wildly unrealistic. The market priced in not just the executive order Trump actually delivered, but an idealised version – including immediate purchases of hundreds of thousands of Bitcoin, comprehensive regulation, and even a "Bitcoin dollar" backed by the Treasury.
Let’s not forget the biggest obstacle facing that idea - an approval from the Congress to fund these pitches.
Second, the technical reality of overbought markets. By January, Bitcoin's Relative Strength Index had reached levels not seen since 2021's peak. A correction was inevitable – the executive order simply provided the catalyst.
Third, macro headwinds intensified. China's warning of readiness for "tariff war, trade war, or any other type of war" undermined the market narrative of smooth economic sailing. The US debt ceiling looms again. And the Fed remains hawkish despite Trump's pressure for rate cuts.
The biggest concern has been the unending trade wars after Trump announced reciprocal tariffs against multiple nations.
Read: Macros Dump Crypto Despite Trump Pump💸
For crypto investors conditioned by years of "buy the rumour, sell the news" cycles, the collapse feels painfully familiar – just at a larger scale and with presidential policy as the trigger.
As Ryan Rasmussen of Resterly Rock noted on Twitter, we've now hit "almost every negative catalyst" from their 2025 risk list – from "disappointment from DC" to "memecoin mania failure."
It hasn’t been a zero sum game though.
What’s Next?
There have been post-election catalysts for crypto, as Rasmussen pointed out in a reply to his original tweet.
Buying by corps (early stages)
U.S./international strategic bitcoin reserve (double edged-sword b/c could be more than BTC)
Better regulatory/political climate (SEC pivot)
Tight supply due to BTC halving (early stages)
Removal of reputational risk (early stages)
Looking beyond the immediate price reaction, the Strategic Bitcoin Reserve does represent a landmark moment for crypto.
As Matt Hougan said, the reserve fundamentally changes the landscape by:
Dramatically reducing the likelihood of a US Bitcoin ban
Creating incentives for other nations to establish their own reserves
Accelerating institutional acceptance of Bitcoin as a legitimate asset class
While the executive order disappointed traders hoping for a price catalyst, it may ultimately prove more significant for crypto's long-term legitimacy than any short-term buying programme.
Treasury Secretary Scott Bessent also clarified in his recent interview that the government would indeed explore ways to buy more Bitcoin beyond just ‘not selling’ it.
Senator Cynthia Lummis's Bitcoin Act – which aims for the Treasury to acquire one million Bitcoin – remains alive, even if it has struggled to gain co-sponsors. Industry lobbyists continue pushing for a more aggressive acquisition strategy.
For markets conditioned to instant gratification, though, the slow burn of institutional adoption holds little appeal compared to the rush of a government-fuelled buying spree.
Token Dispatch View 🔍
The Trump-Pump-Dump trifecta offers a glimpse into how markets process political narratives. What we're witnessing is more than a price correction - it’s the reconciliation of market aspirations with governance reality.
When campaign promises meet constitutional constraints, markets inevitably recalibrate. Without congressional appropriations, Trump could only direct the government to hold existing Bitcoin, not embark on the buying spree using taxpayers’ money.
The Strategic Bitcoin Reserve represents the perfect political compromise: symbolically powerful but fiscally neutral. It gives Trump a headline win without budget impact – masterful politics, but poor rocket fuel for assets already trading at premiums.
This correction, painful as it is for recent buyers, may prove healthy in the long run. Markets built on political promises rather than fundamental developments often fail the test of time. However, the reserve, despite underwhelming traders, establishes a framework for Bitcoin's legitimacy that will outlast any administration.
It’s interesting how the market's reaction lays bare crypto's current state. For all the talk of institutional adoption and mainstream acceptance, price movements still demonstrate the dominance of retail sentiment, leverage, and momentum over fundamental value assessment.
Those who rode the entire Trump Trade – from campaign promises to summit implementation – experienced a textbook market cycle compressed into months instead of years. The "buy the rumour, sell the news" dynamic played out across an election, inauguration, and policy rollout in record time.
Looking ahead, two competing forces will shape markets through 2025: the slow-burning institutional adoption catalysed by regulatory clarity versus the immediate headwinds of macroeconomic uncertainty and fading stimulus hopes.
For Bitcoin maximalists, current prices still represent a victory – trading at levels that seemed impossible during 2022's crypto winter. For those who bought the post-election euphoria, the lesson is more painful: in markets the distance between promise and implementation is where expectations often die.
Don’t start wondering if the Trump administration matters for crypto - because it clearly does. What you need to wonder, though, is whether markets have fully digested the reality gap between campaign maximalism and governance constraints or if there is more to come.
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Trump pulled off the perfect con.