The global crypto market has lost nearly $1.9 trillion in value since peaking at $4.379 trillion in early October, based on data from CoinGecko, with around $800 billion wiped out in the past month alone. | Photo credit: Dado Ruvic
Bitcoin fell as much as 3.8 percent to a low of $69,858, the weakest since November 2024, when Republican Donald Trump won the US presidential election after signaling his intention to support crypto during his campaign.
Bitcoin has already fallen nearly 8 percent this week, bringing year-to-date losses to almost 20 percent. Ether, which fell almost 2 percent to $2,090, is down almost 30 percent this year.
Markets ‘fear a hawk’ with Warsh
The latest rout in cryptocurrencies, which has come hard and fast, was caused, according to analysts, by the appointment of Kevin Warsh as the next chairman of the Federal Reserve amid expectations that he could shrink the Fed’s balance sheet.
Cryptocurrencies are widely seen as beneficiaries of a large balance sheet, as they have tended to recover as the Fed lubricated money markets with liquidity – a support for speculative assets.
“The market fears a hawk with him,” says Manuel Villegas Franceschi of the next generation research team at Julius Baer. “A smaller balance sheet will not give crypto a tailwind.”
The global crypto market has lost nearly $1.9 trillion in value since peaking at $4.379 trillion in early October, based on data from CoinGecko, with around $800 billion wiped out in the past month alone.
To be fair, cryptocurrencies have been struggling for months since a record crash last October sent bitcoin plummeting from a peak as leveraged positions were wiped out.
This has led to investors becoming less interested in digital assets and sentiment towards the sector has become fragile.
“We believe this broader decline is primarily driven by massive withdrawals from institutional ETFs. These funds have seen billions of dollars of outflows every month since the October 2025 recession,” Deutsche Bank analysts said in a note to clients.
They added that US spot bitcoin ETFs witnessed outflows of over $3 billion in January, following outflows of around $2 billion and $7 billion in December and November respectively.
“We believe this steady selling is a signal that traditional investors are losing interest and that overall pessimism about crypto is growing,” the analysts said.
Broader issues in the technology sector
Bitcoin’s fate has been tied to the broader technology sector for some time now. The price tended to rise, mainly due to investor enthusiasm about artificial intelligence.
This week’s plunge in global software stocks has accelerated the decline in the value of bitcoin, ether and other tokens.
Market watchers are starting to wonder if this decline marks the start of a steeper correction.
“There are concerns about crypto miners and whether we could consider forced liquidations if prices continue to fall, which could lead to a vicious cycle,” Jefferies strategist Mohit Kumar said in a note.
“Our view on crypto has always been that it should never represent more than a very small portion of the overall portfolio. However, it is also an asset class that is heavily owned, especially by retail investors, and therefore contributes to overall market risk.”
Published on February 5, 2026
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