Bitcoin Plummets, Triggering $2 Trillion Drop in Crypto Market Value
By Gertrude Chavez-Dreyfuss, Rae Wee, Amanda Cooper, Reuters
Published February 6, 2026
Bitcoin experienced a sharp decline on Thursday, accelerating a widespread loss in the cryptocurrency market amid deteriorating risk sentiment influenced by volatility in precious metals and a broad selloff in technology stocks. The global crypto market has seen a staggering $2 trillion wiped out since its peak in early October 2025. ### Bitcoin Hits Lowest Level Since October 2024
Bitcoin (BTC), the world’s largest cryptocurrency, dropped to a low of $63,295.74, its weakest point since October 2024—a period prior to Donald Trump’s presidential election victory, when he promised to support cryptocurrencies during his campaign. The digital currency was last seen down 12.6% at $63,525, marking its largest one-day fall since November 2022. Data from CoinGlass indicated that approximately $1 billion in bitcoin positions were liquidated over the past 24 hours alone. Bitcoin has declined about 17% over the past week, resulting in a total loss of 28% since the start of 2026. ### Ether Also Suffers Major Losses
Ether (ETH), the second-largest cryptocurrency by market capitalization, mirrored bitcoin’s downturn and fell more than 13% to $1,854 by Thursday evening. Ether’s losses for the week reached 19%, while it plunged nearly 38% year-to-date.
Market Sentiment Dragged by Metals and Tech Stocks
The slump in cryptocurrencies coincided with increased volatility in precious metals, which have experienced speculative flows and leveraged buying. Silver prices notably plunged as much as 18%, hitting lows near $72.21. Equities also suffered, with the S&P 500 hitting a seven-week low and the Nasdaq falling to its lowest in over two months. The technology sector, particularly shares linked with artificial intelligence, faced renewed selling pressure.
Nic Puckrin, investment analyst and co-founder of Coin Bureau, commented, “It’s clear the crypto market is now in full capitulation mode. If previous cycles are anything to go by, this isn’t a short-term correction but rather a transition phase that typically takes months to resolve.”
Crypto Market Impact Extends to Related Stocks
The drop in cryptocurrency prices has also negatively affected publicly traded companies holding bitcoin and other digital assets, raising concerns that the market turmoil is spreading beyond cryptocurrency token prices.
Concerns Over Federal Reserve Policy Movements
The rout has been further exacerbated by political developments. Analysts pointed to the impact of President Trump’s nomination of Kevin Warsh as the next Federal Reserve chair. Warsh is widely perceived as a "hawk" who may prioritize shrinking the Fed’s balance sheet, a move seen as bearish for speculative assets like cryptocurrencies.
“Cryptos have benefited from the Fed’s large balance sheet and liquidity injections,” noted Manuel Villegas Franceschi from Julius Baer’s next generation research team. “With a smaller balance sheet anticipated, there won’t be any tailwinds for crypto.”
Institutional Investors Pulling Back
Cryptocurrencies have been under pressure for months following a record crash last October that wiped out many leveraged positions. According to Deutsche Bank analysts, significant withdrawals from institutional cryptocurrency exchange-traded funds (ETFs) have played a major role in pushing prices down.
“U.S. spot bitcoin ETFs experienced outflows exceeding $3 billion in January alone, following losses of around $2 billion in December and $7 billion in November,” they said. This steady selling by traditional investors indicates growing pessimism toward the crypto market.
Linkages to the Technology Sector and Future Outlook
Bitcoin’s price movements have closely tracked trends in the broader technology sector, which has been a significant driver, especially amid heightened interest in artificial intelligence. The recent selloff in tech stocks has further dampened investor enthusiasm for digital currencies.
Jefferies strategist Mohit Kumar warned of the potential for miner distress and forced liquidations if prices continue to decline, possibly triggering a vicious downward cycle. Kumar cautioned that crypto should represent only a very small portion of an investment portfolio due to its volatility and heavy retail ownership, which adds to overall market risk.
The current cryptocurrency downturn, reflecting a convergence of political, financial, and sector-specific pressures, suggests that investors may face extended periods of volatility as the market undergoes a potential reset.
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Tags: bitcoin, cryptocurrency, crypto market, Ethereum, Kevin Warsh, Federal Reserve, tech stocks, precious metals, market volatility