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3 min

Posted by

Ashley Murphy, CFP® GFP Fellow

Ashley works with clients to bring strategy, structure, clarity and confidence to their global financial lives and keep it that way. In 2013, Ashley founded Arete Wealth Strategists, a fee-only financial planning and investment management firm for Australian/American expatriates.

March 3, 2026

Crypto Crisis

The cryptocurrency world is experiencing what it always wanted: government approval and institutional credibility. President Trump has declared that he wants to establish the United States as the ‘crypto capital of the world.’ The U.S. has taken steps to integrate digital assets into the U.S. financial system and reduce regulations. A recent executive order establishes bitcoin as a government reserve asset, with the Strategic Bitcoin Reserve capitalized with digital tokens and owned by the U.S. Treasury Department. America now has a U.S. Digital Asset Stockpile, and the Trump Administration features the first ever ‘crypto czar.’

Meanwhile, a new cadre of ETF investment pools now allow citizens to invest their retirement accounts directly into bitcoin and ethereum without having to worry about digital wallets. So-called ‘institutional ownership’ of bitcoin by mainstream organizations has risen from 0.9% in 2014 to 19.8% today.

With all this newfound credibility, one might expect bitcoin and other crypto tokens to be experiencing the best of times. But in fact, the value of a bitcoin token, which reached $120,000 in the summer, has fallen more than 50%, trading at around $60,000 currently—and the drop appears to be continuing. Over the same period, ethereum tokens have dropped from more than $5,000 down into the $2,000 range. Crypto owners collectively have lost roughly $1 trillion in what analysts are describing as a bloodbath.

Cryptocurrency volatility is nothing new; a downturn in 2013 eliminated much of Bitcoin’s value, and in 2017 the tokens skyrocketed before tumbling again in 2018. But to some, the current downturn feels different. The current selloff has raised new questions about the purpose of digital assets whose sole existence is in computer ledgers. Is it a hedge against inflation or political uncertainty? Gold and silver appear to be taking on that role, as they have in the past. Is it a currency where people can buy and sell? Yes, if you’re a gun-runner or need to launder drug money, but if you’re heading to the grocery store it’s unlikely they’ll want you to open your digital wallet. Stablecoins—which are convertible directly to more traditional currency—are now being used to facilitate payments—and neither bitcoin nor ethereum are among them.

The problem might be the public’s evolving perspective on the crypto market. Once, bitcoin and ethereum were an exciting new development, a truly libertarian innovation that always seemed to rise in value after every pullback. But now they look like every other Wall Street instrument, available in ETFs, with their own ticker symbols like stocks and bonds. From there, it’s a small step to comparing the tangible value of stocks and bonds with ghosts in the computer circuitry.

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