After Wall Street's Big Gamble on Crypto, Retail Investors Pay a "High Price"

Through Wall Street-approved funds, many retail investors flocked to the crypto paradise promised by the Trump administration, only to now experience the full force of the market's volatility.

Bitcoin and a subsequent series of altcoin exchange-traded funds (ETFs) have collapsed, giving back all the gains made since the eve of Donald Trump's return to the White House, erasing the speculative premium that once defined the digital asset boom of this period.

Despite Trump's promise to make the US the global capital of cryptocurrency, bitcoin prices have fallen 50% from their peak to around $63,000. The performance of other cryptocurrencies has been even worse—a gauge tracking 50 small-cap tokens has dropped 67% from its recent high in October. Overall, the market's capitalization has shrunk by at least $700 billion over the past week.

This disaster marks a sharp reversal in the fate of an asset that Trump once vowed to elevate to a national infrastructure priority. With the White House's pro-digital asset mission paving the way, regulators cleared the path for a slew of exchange-traded products. Fund managers moved quickly to seize the opportunity, launching funds linked not just to blue-chip tokens but also to higher-risk coins, packaging them into easily tradable ETFs that included speculative strategies and thematic bets.

However, for retail investors, the arrival of institutional backing has so far brought more pain than protection.

"Having a pro-crypto government doesn't magically make downside volatility disappear. Any investor expecting that is paying an expensive tuition to learn otherwise," said Nate Geraci, president of NovaDius Wealth Management. "Like many other asset classes, crypto is bound to experience sharp declines—a reality that neither the White House nor regulators can prevent."

Editor: Liu Mingliang