That's happening because crypto 'value' doesn't exist in a vaccuum, immune to the vagaries of the tradFi markets. When shit hits the fan, credibility matters. That's why traders park cash in government bonds when a market sell-off happens; a government bond essentially guarantees you get your money back quickly when you're ready to go back into the markets.

The recent moves by the administration have been so incompetent as to tank the bond market as well, thereby leaving few safe harbors. And no harbor is less safe than crypto.

By now everyone who stands to gain from (ab)using crypto is probably already convinced. Almost everyone else heard so much about scams and illegal activities around crypto that they find it too risky. So the current admin is preaching to a small choir, to the angst of the large one.

What I like is that every time there's a hack, or someone loses money over crypto either due to some illegal action or just unintended consequence of using it, you have a few more people demanding more regulation and state intervention. If only crypto regulation was scoped exclusively to when they need it after being swindled out of it.