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Bitcoin got hammered Thursday morning. The crypto king dropped 9% in 24 hours during Asian trading, briefly touching $69,031 before trying to find some footing in what traders are calling a brutal selloff that’s hitting everything from stocks to precious metals.
The drop wiped out Bitcoin’s gains from its 2021 peak of $69,000, and things look pretty grim for crypto holders right now. Over the past year, Bitcoin has shed almost 30% of its value and sits about 45% below its October high, according to Bitcoin Magazine Pro. Asian markets got crushed alongside crypto, with South Korea’s Kospi index falling around 4% as AI-related stocks took a beating. There’s growing doubt about whether the AI investment wave that propped up tech stocks through 2025 can keep going, and investors are getting nervous about overvaluation and companies potentially cutting back on AI spending.
The pain didn’t stop at crypto.
Silver plunged 17% while gold dropped over 3%, showing that traders are basically dumping anything risky they can get their hands on. It’s looking like a classic deleveraging situation where people are scrambling to raise cash fast.
Institutional money is fleeing Bitcoin too, which makes the situation even messier. U.S.-listed Bitcoin ETFs saw $545 million in withdrawals Wednesday, marking the second straight day of outflows. BlackRock’s IBIT fund got hit hardest with $373 million walking out the door. CryptoQuant research shows that’s a massive reversal from 2025 when spot ETFs were net buyers, scooping up roughly 46,000 Bitcoin. Now they’ve become net sellers in early 2026, dumping 10,600 BTC so far this year.
Bitcoin’s price sits about 20% lower for the year and 45% below its peak near $126,000 last October.
Market watchers say the pattern of declining highs and lows points to ongoing distribution rather than panic selling from retail traders. That’s actually worse news because it means big players are methodically getting out rather than small investors freaking out and creating a quick washout that could bounce back fast.
All eyes are on MicroStrategy now as the biggest corporate Bitcoin holder prepares to drop its fourth-quarter earnings. The company owns around 713,502 BTC, and any changes to their strategy could move markets. MicroStrategy’s stock has crashed over 70% from its 2025 peak, trading near $120 – levels not seen since September 2024. Public pension funds that bought into the company are sitting on massive paper losses, and that’s creating political headaches nobody wants to deal with.
But MicroStrategy Chairman Michael Saylor isn’t backing down. The company just grabbed 855 BTC for about $75.3 million, paying an average of $87,974 per Bitcoin. Saylor keeps saying he’s buying more, though investors are starting to wonder if that’s smart or stubborn.
Bitcoin miners are getting squeezed hard. With Bitcoin near $71,000 and production costs estimated around $87,000, margins are basically gone. The network hashrate dropped about 12% from October peaks, and daily mining revenue briefly hit just $28 million. There’s a mining difficulty adjustment coming February 8 that might reduce difficulty by 14%, which could help miners survive if Bitcoin doesn’t fall further.
U.S. Treasury Secretary Scott Bessent told the House Financial Services Committee that the government can’t support Bitcoin directly or tell banks to buy it. Representative Brad Sherman asked about possible intervention like the 2008 financial rescues, but Bessent shot that down. He said any government Bitcoin holdings come only from law enforcement seizures, not taxpayer money.
Bitcoin’s market cap fell to $1.39 trillion with trading volumes hitting $101 billion as it hovers near weekly lows.
Tesla’s crypto position is getting attention too since the company bought $1.5 billion worth of Bitcoin in early 2021. Tesla reports fourth-quarter 2025 results next week, and investors want to hear if CEO Elon Musk will address how Bitcoin’s price swings affect the balance sheet. JPMorgan reportedly cut its crypto exposure, with sources saying the bank scaled back trading operations because of volatility. Robinhood saw crypto trading volumes drop in January as Bitcoin’s price slid, suggesting retail investors are pulling back after getting burned. The Federal Reserve’s decision to hold rates steady might be adding to the risk-off mood that’s hurting Bitcoin and other speculative assets.
The cryptocurrency selloff is spreading beyond Bitcoin to smaller digital assets, with Ethereum down 12% and Solana falling 15% in the same 24-hour period. Major crypto exchanges reported system slowdowns as trading volumes spiked, with Binance and Coinbase both experiencing brief outages during peak selling pressure. Crypto lending platforms like Genesis and BlockFi are facing renewed scrutiny as their Bitcoin-backed loans come under pressure from the price decline.
Several Wall Street analysts are now questioning whether Bitcoin can hold the psychologically important $70,000 level. Goldman Sachs commodity strategists noted that Bitcoin’s correlation with tech stocks has reached 0.85, the highest since 2022, making it more vulnerable to broader market selloffs. Meanwhile, countries like El Salvador, which made Bitcoin legal tender and holds over 2,300 BTC, are facing mounting fiscal pressure as their crypto reserves lose value rapidly.
