Bitcoin: The Current Price & Its Real Drivers

The Correlation Question

Paul Krugman, fresh off his Nobel Prize and still unafraid to stir the pot, has linked Bitcoin’s recent price slump to the perceived decline of Donald Trump’s influence. His argument – that Bitcoin’s value became intertwined with Trump-era policies and patronage – is certainly provocative. Bitcoin, after hitting a high of $126,000 last month, has slid back to around $87,000 as of Wednesday (November 26, 2025), a pretty sizable correction.

But is this a genuine "Trump trade" unraveling, or just another bout of crypto volatility dressed up in a political narrative? Krugman points to Trump's pro-crypto stance, his family's investments (estimated at $870 million), and policy moves like the executive order allowing crypto in retirement accounts. He even mentions the pardon of Binance founder Changpeng Zhao. It's a compelling narrative, but correlation doesn't equal causation, and the crypto market has always been a law unto itself.

What's missing from Krugman's argument is a rigorous, quantitative breakdown of the actual impact of Trump's policies on Bitcoin's price. Did the announcement of the executive order actually trigger a measurable price surge? Did Zhao's pardon correlate with a sustained rally? Without that granular analysis, it's just speculation.

Digging into the Data

Let's look at some alternative explanations. Bitcoin's rise coincided with the launch of spot Bitcoin ETFs, like BlackRock's IBIT, which now manages close to $70 billion. BlackRock's Strategic Income Opportunities Portfolio increased its IBIT holdings by 14% between June and September. JPMorgan, which CEO Jamie Dimon once mocked Bitcoin as “worse than tulip bulbs,” is now offering structured notes tied to IBIT's performance. (That's a pretty significant turnaround, if you ask me.)

These structured notes are particularly interesting. JPMorgan's product, for example, offers a 16% return if IBIT stays above a certain price next month. If it doesn't, investors hold until 2028, with a potential 1.5x return if IBIT exceeds a target price. But there's also downside: a loss of principal if IBIT falls more than 30%. Morgan Stanley has a similar product, offering enhanced payouts if IBIT rises or stays flat. JPMorgan's Bitcoin Structured Notes Offer Potentially Massive Returns—If BTC Surges by 2028

Here's where things get interesting. The rise of these instruments is a double-edged sword. They bring institutional money into Bitcoin, driving up demand and, therefore, the bitcoin price. But they also create a new layer of complexity and leverage, potentially amplifying both gains and losses. The prospectus warns that investors “should be willing to lose a significant portion or all of their principal amount at maturity.” Volatility in Bitcoin, it adds, may be extreme.

Could the recent bitcoin price dip be a correction driven by the unwinding of these leveraged positions, rather than a referendum on Trump's political fortunes? Hard to say for sure, but the timing lines up. The bitcoin price has fallen more than 30% from its October all-time high, slipping to around $87,000. This drawdown keeps markets on edge.

And this is the part of the report that I find genuinely puzzling: if the bitcoin price is being artificially inflated by these instruments, what happens when the music stops? Who's left holding the bag?

Beyond the Headlines

Ultimately, Krugman's analysis feels a bit too simplistic. While Trump's policies may have created a favorable environment for crypto, attributing Bitcoin's entire trajectory to his influence ignores the broader market forces at play. Institutional adoption, ETF inflows, and the rise of complex financial products are all significant factors.

The market also lacks the inflows needed to stabilize prices. According to Citi, the key $80,000–$83,000 support zone is being tested repeatedly. Mid-tier whale wallets holding 100+ BTC are ticking higher — a potential sign of bargain hunting — but larger whale cohorts continue to offload, contributing to weakened spot demand.

The truth is, Bitcoin's price is influenced by a multitude of factors, some rational, some less so. To assign sole responsibility to Trump is to misunderstand the very nature of this beast. White House spokesperson Kush Desai said the Trump administration is implementing policies meant to help cryptocurrency prosper. He rebuked the idea that non-policy factors in Trump’s presidency would have the ability to move the bitcoin price.

Too Much Narrative, Not Enough Numbers

Krugman's narrative is compelling, but it lacks the rigorous data analysis needed to back it up. While politics undoubtedly play a role in shaping economic trends, attributing Bitcoin's price fluctuations solely to Trump's waning power is a stretch. The market is far too complex, and the influence of institutional investors and complex financial products is far too significant to ignore.