Democrats Mock Crypto Crash, Face Backlash From Industry Leaders

The controversy erupted when the Democratic Party’s official X account posted a single word—’yikes’—alongside a chart showing Bitcoin’s precipitous decline. The graphic was paired with an image of former President Donald Trump wearing a MAGA hat, a move industry figures interpreted as gloating over market turmoil. The timing was particularly sensitive: according to CoinGecko data, Bitcoin had dropped 8.1% over 24 hours to $65,729, extending a 33.1% decline from the previous year. Coinglass data revealed the human and financial scale of the downturn, with approximately $2.6 billion in total liquidations. Of that, a staggering $2.13 billion came from long positions, with Bitcoin alone accounting for $1.35 billion in liquidated bets.

The response from crypto leaders was swift and severe. Custodia Bank CEO Caitlin Long directly challenged the Democrats’ narrative, replying, ‘The sad thing about this tweet is that you’re gloating in a lot of Democrats’ painful financial losses right now… You do know that many Democrats own crypto too, right?’ Her sentiment was echoed by Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, who warned of political consequences: ‘Probably not the message you want to be sending to the crypto community before midterms.’ The backlash highlighted a fundamental disconnect: the Democratic post framed crypto losses as a partisan issue, while the reality of liquidations affected a broad, cross-party swath of investors.

The incident has amplified concerns that partisan mockery could alienate a growing bloc of pro-crypto voters. Gemini co-founder Tyler Winklevoss quoted the Democrats’ post with a terse condemnation: ‘It was always political persecution.’ This perspective frames regulatory and political scrutiny as an attack on the asset class itself. The reaction extended beyond industry executives to political figures with crypto ties. Pro-XRP attorney John Deaton, currently a U.S. Senate candidate in Massachusetts, connected the market pain to broader economic policy failures by both parties. He argued that decades of deficit spending and currency devaluation have driven regular people to seek alternative stores of wealth like cryptocurrency.

Perhaps the most scathing political critique came from former White House Communications Director Anthony Scaramucci, who called the Democrat post a ‘stupid tweet.’ He added, ‘the best thing Trump has going for him is the incompetence of Democrats on this topic.’ This comment points to a strategic vulnerability for Democrats as Republicans, including Trump, increasingly position themselves as allies of the digital asset industry. The episode suggests that dismissive or mocking rhetoric from one party could actively drive crypto investors and entrepreneurs into the arms of the other, turning a complex policy area into a potent electoral liability.

The social media skirmish is merely the surface of deepening partisan trenches around cryptocurrency policy. The Democrats’ post followed inflammatory rhetoric from California Governor Gavin Newsom’s office, which linked Trump to the market crash. Newsom has previously targeted Trump’s connections to pardoned crypto figures like binance/?utm_source=CVJ.Ai&utm_medium=glossary&utm_id=CVJ.AI" target="_blank">Binance founder Changpeng Zhao and Silk Road creator Ross Ulbricht. Meanwhile, on Capitol Hill, Democrats are pursuing investigations that intertwine crypto, Trump, and foreign policy. Representative Ro Khanna has launched a probe into a $500 million UAE investment in World Liberty Financial, the Trump family’s crypto company, questioning its potential influence on U.S. AI chip export policy.

Senator Elizabeth Warren (D-MA) has been a vocal critic, repeatedly warning about Trump’s conflicts of interest. She notes his family has amassed over $1.2 billion in financial gains from digital assets since his second term began. Warren also opposes proposals to allow crypto in 401(k) retirement plans, reflecting a more cautious regulatory stance common among many Democrats. This environment—where one party investigates crypto deals and the other embraces industry figures—creates a clear political dichotomy. As digital asset legislation advances, the Democrats’ ‘yikes’ moment may be remembered not just for its insensitivity, but as a symbol of a party struggling to message to a financially engaged and increasingly politically organized community of crypto holders.