Are Cryptocurrencies Dying? The Big Tech Collapse Draws Closer with a “Crypto Winter” Approaching
by Brian Shilhavy
Editor, Health Impact News
Donald Trump was swept into power in the November 2024 elections funded to a large extent by Silicon Valley billionaires.
In return for their support, Trump appointed JD Vance, who was handpicked by Silicon Valley as the Vice President. JD Vance is a disciple of Peter Thiel, who along with Elon Musk founded PayPal as part of the PayPal Mafia. See:
The Man Behind Trump’s VP Pick: It’s Worse Than You Think
Big Tech has been a huge part of Trump’s 2.0 Presidency, as we have seen here in 2025 with the push to make cryptocurrencies a larger part of the U.S. and worldwide financial system.
Before the end of the first quarter in March of 2025, the Trump family started their own cryptocurrency financial network to challenge traditional banking, called World Liberty Financial. I covered it back then. See: Trump Takes on the Banking Industry by Developing his Own Cryptocurrency Financial Network
However, the most common way people use cryptocurrency today is through selling and buying it like an asset, which is why Blackrock and other giant Wall Street investors have created their own hedge funds around the price of cryptocurrencies.
To truly replace banks and become an entirely new financial system, crypto has to be used in financial transactions in places like the retail sector, where currently the credit card companies (Visa, Mastercard, etc.), backed by FDIC insured bank accounts, still dominate.
So in August this year, the Trump family-owned World Liberty Financial purchased a publicly traded Canadian company, Alt5 Sigma, giving World Liberty Financial a public stock listing in the U.S., and giving them an existing platform where cryptocurrencies were already being used for online payments in ecommerce stores and gaming sites.
Fast forward to today as we near the end of 2025, and things are not going well for Trump’s new crypto financial system, or its investors.
This was published this week on The Information:
Trump Family Crypto Deal Runs Aground
Crypto firm that did a complicated deal with the Trumps warns it may face lawsuits and regulatory probes.
By Michael Roddan
Excerpts:
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Troubles with the combined company quickly surfaced.
Weeks later, Alt5 suspended its CEO pending the outcome of an investigation by a new outside law firm, and the company warned staff it would likely face litigation and regulatory investigations, according to a letter from the firm distributed to employees.
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In the three months since, Alt5 Sigma’s shares have fallen 75% and the value of the Trumps’ crypto currency, $WLFI, has fallen by nearly half. The company also disclosed that it had been convicted of money laundering in Rwanda.
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The American Consumer Still has More Power than they Realize
It is not surprising that the Trump family’s desire to create a financial system that would replace traditional banking with cryptocurrency has failed, forcing them to pivot to using cryptocurrencies as investment assets instead, just as the Wall Street hedge fund managers are doing.
To gain any traction in the payments sector and replace credit cards, consumers need to use it. And overwhelmingly in the U.S., consumers are NOT buying it, and prefer to stick with traditional banking and credit cards.
According to a Pew Research Center survey last year, in 2024, only 17% of U.S. adults say they have ever invested in, traded or used a cryptocurrency. They also report that this number remained roughly unchanged since 2021. (Source.)
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The Approaching Crypto Winter
Ken Brown, writing on finance and tech at The Information, published an article this week on the crypto market and the impending “Crypto Winter.”
Crypto Winter Will Be Different This Time
Excerpts:
Winter is coming, not just in the seasons but in the crypto market. If the current downturn turns into another crypto winter, it will have a bigger impact on the mainstream financial system than it has in the past.
Bitcoin has fallen 30% in less than two months and is down for the year, while other cryptocurrencies have crashed by much more.
This has occurred despite the most crypto-friendly regulatory environment ever.
What’s become clear is that instead of building an alternate financial system, the crypto industry used its newfound freedom to go crazy.
Some of this is just crypto being crypto. The thing to watch this year, and maybe the riskiest development in crypto, has been the rise of stablecoins.
These cryptocurrencies, which are pegged to the dollar, are the closest thing to an alternate financial system. The most boring part of crypto got blessed with a friendly new law dubbed the Genius Act, giving it instant credibility.
That’s led to a bunch of new stablecoin announcements and increased use, especially overseas. This week Klarna, the Swedish buy-now-pay-later provider, said it would launch a stablecoin called KlarnaUSD next year. They are joining payments company Western Union and cloud company Cloudflare in creating new offerings.
Stablecoins are currently dominated by Circle and Tether, which together have a market cap of roughly $250 billion.
Before we delve further into stablecoins, though, it’s worth looking more into the current meltdown.
Ground zero for the sell-off is a Singapore-based crypto exchange, Hyperliquid, that handles $13 billion in trades a day with 11 employees and offers staggering amounts of leverage. It was home to a $10 billion liquidation in October that ricocheted across markets. Hyperliquid also has a stablecoin.
On the traditional stock exchanges, crypto treasury stocks—listed companies stuffed with crypto—are among the biggest losers.
Until recently, the euphoria in crypto meant these stocks traded at a premium to their crypto holdings. Investors decided that paying $2 for every $1 of crypto was a good idea.
The companies logically issued stock or borrowed money to buy more crypto, driving up prices.
This trade has unwound painfully, and now the crypto treasury companies are trading at a discount to their holdings. The logical move for them is to sell crypto and buy back their shares. That cycle of selling can drive down prices.
All that is a reminder that stablecoins’ promise of zero volatility warrants some skepticism.
Because they are more closely linked to the financial system than any other form of crypto, stablecoins require more scrutiny and caution.
They are also closer to real money than anything else in crypto because they meet one crucial criteria of money–they are a store of value. Dogecoin can’t say that.
Stablecoins keep their 1:1 peg against the dollar by holding safe assets such as short-term Treasurys, bank deposits and money market funds. That’s legit, and is required by the stablecoin law.
It is ironic that stablecoins rely on traditional financial tools, which much of crypto disdains, to maintain their stability.
History has shown it’s easier to promise stability than to deliver it. Just this month, a small, fringe stablecoin blew up, wiping out around $200 million. The stablecoin, run by a company called Stream Finance, promised a yield of around 18% but collapsed after losing $93 million.
Stream Finance realized quickly that the promise of stability has a dark side—the bank run. While the company’s stablecoin operates differently than the major ones, the investor reaction is the same. It’s one thing to lose money on a risky investment.
It’s another to lose your savings. That invites panic, frantic withdrawals and crashes, and these have happened in every asset that promises to give people their money back in full.
“There has been a run, there will be a run, money market funds, repos, you name it, there will be a run,” said Lee Reiners, a fellow at the Duke Financial Economics Center and a former Federal Reserve official.
But memories are short, especially in crypto.
When Silicon Valley Bank failed in 2023, one of the biggest casualties was Circle, the dominant stablecoin in the U.S.
When Circle announced it had $3.3 billion of assets in SVB, it suffered its own bank run, and its stablecoin fell to 88 cents on the dollar. It was saved when regulators said the federal government would make all deposits at SVB whole.
As I said, memories are short. A crack in a money market fund led to one of the darkest moments of the 2008 global financial crisis. Drama in the Treasury market has caused several crises.
Stablecoins add another source of unpredictable risk to the financial system.
In retrospect, everyone will say we should have seen it coming.
The Information added a new reason to fear owning crypto: Home Robberies.
Crypto Robbery Rattles Investors
The recent bitcoin sell-off wasn’t the only cause for alarm among crypto investors this week. Many were rattled by news that a tech investor was robbed of $11 million worth of crypto at his home.
Doorbell camera footage shows someone posing as a delivery worker approaching the home, accessible on street level in Mission Dolores, and asking for “Joshua,” who opened the door. They then asked to borrow a pen and followed the victim into the home.
The investor—whom we’re not naming, to protect his privacy—was bound with duct tape and forced at gunpoint to give up his cellphone and laptop, containing the digital keys to his crypto accounts, the SF Standard reported.
The episode highlights a major vulnerability of crypto accounts compared with bank accounts.
A robber trying to shift large amounts of money out of a bank account will typically encounter questioning by the bank and often a delay of a few days—whereas crypto can be moved instantaneously.
That’s of course one of the advantages of crypto over traditional bank accounts, proponents have long argued.
But as the Saturday robbery demonstrates, it can work against crypto investors.
The Big Tech Collapse is Coming – Be Prepared
Almost everyone on Wall Street is now debating the collapse of the AI Bubble, whether we are near to it, or that it is still a long ways off, with very few now not acknowledging that a huge correction in the economy is coming due to our over-spending on Tech, and especially AI.
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