Is Bitcoin a "Political Transaction"? What Does the Recent Collapse Say

In recent weeks, the price of Bitcoin has dropped sharply by approximately 25% since the end of October. This decline is not an isolated market fluctuation but reflects a deeper underlying pattern: investors are re-evaluating an asset class increasingly tied to political developments.

When Political Power Weakens, Bitcoin Prices Plummet

Bitcoin has previously surged following certain political events, but the recent decline coincides with a series of political setbacks for Trump on multiple fronts. His net approval rating has dropped significantly over the past month, especially after the overwhelming victories of the Democratic Party in Virginia and New Jersey on November 4th. These election results have shaken the resolve of many Republican lawmakers to follow his stance.

This connection is no coincidence. According to political analysts’ logic, power functions as a unified block — when it weakens in one area, the ability to enforce will diminishes across all fronts, including efforts to support the cryptocurrency industry.

What Is Bitcoin Really?

First, it must be clarified that Bitcoin has never been a practical means of payment — it does not hedge against inflation or financial risks. In fact, its price volatility often moves in tandem with AI tech stocks, and is even more volatile.

The core function of Bitcoin lies in its ability to obscure money flows through encryption technology. These anonymous transactions are not always illegal, but most clearly originate from criminal activities. This anonymity creates a dual effect: it both facilitates illicit activities and makes cryptocurrency holders more vulnerable to becoming targets of crime.

Anyone holding a Bitcoin key — a code to access it — can control it, regardless of how they obtained it. This has led to a series of kidnappings targeting major crypto investors, with criminals demanding victims surrender their keys.

Dark Financial Exploitation Tools

Beyond basic crimes, cryptocurrencies are increasingly used as a means to illicitly profit from inexperienced investors. When prices rise, they can make money, but most do not understand the potential losses when the market crashes.

However, Bitcoin has the capacity to recover because it is not just an asset but also a form of religious faith. Devotees often double their efforts when prices fall, helping it rebound after shocks sufficient to destroy conventional investments.

Connection to Government Policies

Government efforts to support cryptocurrencies are clear — from directives allowing ordinary investors to use 401(k) retirement funds for crypto assets, to other promotional activities. At the same time, authorities are also trying to weaken the regulatory agencies established after the 2008 crisis to protect investors and stabilize the market.

Senior officials are also seeking to ease banking oversight regulations — rules designed to prevent the high risks that led to the financial crisis of the previous century.

The Music Stops, the Billiard Table Collapses

So, what should we understand from the Bitcoin price decline? It reflects the disintegration of a “political gamble” — a bet placed entirely on political influence. While efforts to support cryptocurrencies continue, the power to enforce these policies is clearly waning.

When power weakens, the ability to push forward projects — including facilitating the cryptocurrency industry — also diminishes. This is not just an imaginative analysis but a direct reflection of how power systems operate in the real world.