Crypto Market in Turmoil as Bitcoin Plunges Again!

(New York, Feb 6) Bitcoin extended its slide below the US$70,000 mark, as forced liquidations of leveraged positions and broader market turmoil intensified a selloff that has battered the cryptocurrency market over the past three weeks.

On Thursday (Feb 5), Bitcoin fell as much as 8.3% to US$66,596, its lowest level since October 2024. As of 10:25 a.m. Malaysia time, prices had slipped further to US$64,511.90, rebounding by US$1,710.64 or 2.72%.

Since hitting a record high four months ago, the downturn has wiped out nearly half of Bitcoin’s market value. The selling pressure has spilled over to other cryptocurrencies, related ETFs, and companies such as Strategy that hold large amounts of digital tokens.

All post-Trump gains erased

The decline has erased all gains recorded since U.S. President Donald Trump returned to the White House. Trump’s pro-crypto stance had fueled a sharp rally last year, but cracks began to appear this month. Escalating geopolitical tensions rattled global markets and dampened risk appetite, triggering a sharp drop in Bitcoin from mid-January.

Analysts said forced asset sales to meet fund redemptions, along with cascading liquidations of leveraged positions, amplified the selloff. Chris Newhouse, head of business development at Ergonia, said fear and uncertainty are clearly visible in the market, with each wave of ETF redemptions and liquidations triggering knock-on effects in the absence of strong buyers.

Safe-haven narrative questioned

Bitcoin has often been promoted as an inflation hedge or an alternative to gold and the U.S. dollar, but recent price action shows it behaving more like a high-risk asset, failing to provide protection during periods of market stress. Its growing presence in institutional portfolios has, at times, made it more vulnerable during broad risk-off episodes, especially amid recent volatility in technology stocks and precious metals.

The selloff has rippled across the digital asset space, hitting smaller, less liquid speculative tokens even harder. Marex senior global market strategist Ilan Solot said the decline reflects a combination of factors, including weakness in some technology stocks, strong gold performance, broader risk aversion, and widespread doubts about cryptocurrency valuation frameworks.

He added that while the near-term outlook may remain bearish, the worst could be over, noting that historically such volatility has often been viewed by long-term investors as a buying opportunity.

Crypto-linked firms caught in the fallout

The Bitcoin rout has also dragged down crypto-linked stocks. Strategy, which holds a large Bitcoin position, plunged 17.12% to US$106.99, its lowest level since Feb 29, 2024, and the worst performer in the Nasdaq 100 this year, with a year-to-date loss of nearly 30%.

Against the backdrop of the crypto slump, Strategy reported a net loss of US$12.4 billion for the final quarter of fiscal 2025, largely driven by unrealized losses of about US$17.4 billion from digital assets measured at fair value. The company disclosed that it held approximately 713,502 bitcoins as of Feb 1.

Meanwhile, cryptocurrency exchange Gemini, controlled by the Winklevoss twins, said it plans to cut up to 25% of its workforce and gradually exit the UK, EU and Australian markets, citing operational complexity and high costs in overseas expansion. While Gemini did not cite falling crypto prices as a direct reason, the recent plunge in Bitcoin has continued to weigh on the broader industry.

Gemini shares fell 8.72% on Thursday to US$6.70.