Democrats Face Backlash After Celebrating Crypto Market Downturn

Political schadenfreude meets public outrage as Democratic figures find themselves on the defensive.

The Celebration That Backfired

Several prominent Democrats triggered a wave of criticism this week after making celebratory remarks about the recent cryptocurrency market correction. Social media posts and public statements framing the downturn as a deserved 'reckoning' or 'reality check' for digital asset investors ignited immediate pushback from both the crypto community and neutral observers.

A Tone-Deaf Response?

Critics argue the gleeful rhetoric overlooks the real-world impact on everyday investors and the broader innovation ecosystem. It's one thing to debate regulation—another to cheer financial losses. The backlash highlights a growing disconnect between some political narratives and the mainstream adoption of digital assets, where millions now have skin in the game.

The Finance Jab

Nothing unites people faster than politicians appearing to delight in their portfolio pain—except maybe a sudden bank fee. The episode serves as a stark reminder: in today's market, your investment strategy might be volatile, but political tone-deafness remains a constant.

The fallout continues, raising questions about how policymakers engage with a financial revolution they may not fully endorse but can no longer afford to simply ridicule.

Partisan tensions around crypto intensify

The controversial social media activity followed Bitcoin’s drop to $65,729, down 33.1% from a year earlier. At the same time, the crypto market saw some $2.6 billion in liquidations, with $2.13 billion coming from long positions. Bitcoin led liquidations with $1.35 billion, including $1.1 billion from long positions, while Ethereum saw $443 million in long positions liquidated.

The Democrats’ post followed a tweet from California Governor Gavin Newsom’s press office, which stated that Trump is crashing the crypto markets faster than he’d crash an Epstein party, further inflaming partisan tensions around crypto.

Senator Elizabeth Warren has repeatedly warned about Trump’s conflicts of interest in the crypto industry. She noted that the family has amassed over $1.2 billion in crypto gains since his second term began. She is also opposing proposals to allow crypto in 401(k) retirement plans.

Recently, Newsom launched a website tracking what he called Trump’s “criminal cronies.” He highlighted pardoned crypto figures, including Binance founder Changpeng Zhao and Silk Road creator Ross Ulbricht.

As reported by Cryptopolitan, Representative Ro Khanna launched an investigation into a $500 million investment by the UAE in World Liberty Financial, the Trump family’s crypto company. He is questioning whether the deal influenced US policy on AI chip exports.

In response, Eric Balchunas, a financial and ETF analyst at Bloomberg Intelligence, reminded Democrats that crypto PACs achieved a perfect 48/48 win rate in backed congressional races, including both parties.

According to him, it is pure carelessness to alienate a growing voter bloc that propelled bipartisan wins. A Bloomberg research showed that crypto donors spent $135 million in 2024 to influence policy favorably.

“Probably not the message you want to be sending to the crypto community before midterms,” Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, stated. Gemini co-founder Tyler Winklevoss also quoted the post, saying that it was always political persecution.

Additionally, Custodia Bank CEO Caitlin Long replied to the post saying, “You do know that many Democrats own crypto too, right? […] The sad thing about this tweet is that you’re gloating in a lot of Democrats’ painful financial losses right now.” 

Crypto markets clap back at Democrats with a surge

Bitcoin bounced back sharply on Friday, surging 6% over the last 24 hours to the 70k threshold as crypto investors bought the dip. This is a relief, as the kingcoin had tanked to a low of $60,245, down sharply from its October last year high. 

However, analysts expect the BTC price to remain volatile. This increased volatility occurred as Bitcoin options worth over $2.1 billion are set to expire late today. Data shows that the put/call ratio is 0.60, a sign of earlier bullish positioning before prices fell. 

Altcoins are also recovering, with most of the top coins trading in the green over the last 24 hours. Ethereum is up 5.8%, XRP is up 22%, Solana is up 4.5%, Dogecoin is up 5.8%, and ADA is up 8.2%.  Overall, the crypto market is up 4% to a market cap of $2.39 trillion

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