Bitcoin’s decline causes crypto market losses of around $500 billion in just one week
In the world of cryptocurrencies, a significant drop of almost half a trillion dollars has been witnessed in less than a week, led by the decline of Bitcoin. CoinGecko data reveals that the total value of the crypto market has plummeted by US$467.6 billion (S$594 billion) since January 29. The downward trend was exacerbated by Bitcoin’s tumble to its lowest level since the re-election of US President Donald Trump in November 2024, marking a more crypto-friendly administration.
On February 3, the original cryptocurrency hit a 15-month low of US$72,877 in the United States, causing concern among investors. However, there was a glimmer of hope as Bitcoin managed to regain some ground in Asia on February 4, trading at US$76,200 at 10am in Singapore. Despite this slight recovery, Bitcoin remains down 13 per cent in 2026 and has dropped by 39 per cent from its peak above US$126,000 on October 6.
Market analysts like Ms. Rachael Lucas from BTC Markets noted that the sentiment in Asia remains cautious and defensive due to the ongoing sell-off. Bitcoin’s dip below the US$73,000 mark has instilled extreme fear among investors, reflecting the unstable nature of the cryptocurrency market. The recent volatility across global markets also contributed to the downward trend, with sharp swings observed in gold and silver prices. While precious metals managed to attract buyers after recent losses, cryptocurrencies failed to garner similar support, leading to further declines.
The lack of a strong correlation between Bitcoin and traditional safe-haven assets during periods of geopolitical uncertainty has raised doubts about its status as a digital equivalent of gold. Renowned investor Michael Burry highlighted that Bitcoin is primarily a speculative asset and has yet to establish itself as a reliable hedge compared to precious metals. This sentiment was echoed by Galaxy Digital LP’s CEO, Mr. Michael Novogratz, who observed a shift in investor behavior regarding holding onto Bitcoin regardless of market conditions. The recent sell-off indicates a break in the previously unwavering faith in Bitcoin as a resilient investment option.
As the crypto market continues to navigate through turbulent waters, the fate of Bitcoin and other digital assets remains uncertain. Investors are closely monitoring the situation, evaluating their portfolios, and considering alternative investment options amidst the ongoing market upheaval. The evolving dynamics of the cryptocurrency landscape pose challenges and opportunities for market participants, shaping the future of this volatile yet captivating market.
