Washington's Crypto U-Turn Falls Flat as Institutional Appetite Fades

Bitcoin's all-time high in October 2025 was not sustained due to market factors rather than regulatory barriers. After years of uncertainty, the US government had removed most hurdles for the industry by late 2024 and early 2025, but this did not translate into increased demand or higher prices.

The turnaround began with Donald Trump's return to office in January 2025, which brought a significant shift in policy. A presidential executive order endorsed the use of public blockchains and stablecoins, creating a working group and directing agencies to develop a framework for American digital-asset leadership.

By mid-2026, the government had made considerable progress on its agenda, including launching a dedicated crypto task force, dismissing many litigation cases inherited from previous commissions, and passing the GENIUS Act. This law created reserve, licensing, and disclosure requirements for payment stablecoins and reaffirmed that national banks could provide custody and execution services.

However, despite these developments, institutional appetite for Bitcoin had not grown as expected. By July 2026, US spot Bitcoin ETFs had recorded $3.3 billion in net outflows, with Citigroup reducing its assumption for 2026 ETF inflows from $10 billion to zero and cutting its 12-month Bitcoin forecast to $82,000.