Bitcoin fell sharply on Thursday, with the decline accelerating as risk sentiment weakened in part due to volatility in precious metals and sharp declines in tech stocks.
The world’s largest cryptocurrency fell to a low of US$63,295.74, its lowest since October 2024, when Republican Donald Trump signaled his support for cryptocurrencies during his election campaign, a month before he won the US presidential election. The most recent drop was 12.6% to $63,525, marking the biggest single-day decline since November 2022.
Approximately $1 billion in Bitcoin positions have been liquidated in the past 24 hours, according to data from CoinGlass.
The global cryptocurrency market has lost $2 trillion in value since reaching a peak of $4.379 trillion in early October, with around $800 billion wiped out in the last month alone, CoinGecko data shows.
Bitcoin has already fallen 17% this week, taking its loss for the year to date to 28%. Ether, the second-largest cryptocurrency by market capitalization, fell more than 13% to $1,854 late Thursday. Ether is down 19% this week, taking its losses so far this year to nearly 38%.
Sentiment towards cryptocurrencies has been affected by the recent sell-off in metals and stocks. For example, gold and silver have become more volatile as a result of leveraged purchases and speculative flows. Silver, for example, fell by as much as 18% to a low of $72.21.
In the stock market, the S&P 500 fell to a seven-week low on Thursday and the Nasdaq to its lowest in more than two months as the AI theme came under new pressure.
“It’s clear that the crypto market is now in full capitulation mode,” said Nick Pucklin, investment analyst and co-founder of Coin Bureau. “If previous cycles are any guide, this is no longer a short-term correction but a transition from distribution to reset, which typically takes months rather than weeks.”
The recent collapse in cryptocurrencies has driven down the stock prices of companies that hold Bitcoin and other digital assets, raising concerns that market turmoil may extend beyond token prices.
Markets ‘fear the hawk’ at Warsh
Some analysts pointed out that President Trump’s selection of Kevin Warsh as the next Federal Reserve Chairman has also fueled the recent cryptocurrency selloff on expectations that he could shrink the Fed’s balance sheet.
Cryptocurrencies are widely seen as benefiting from large balance sheets and have tended to rise while the Fed provides liquidity to money markets and props up speculative assets.
“The market is concerned about him becoming more hawkish,” said Manuel Villegas Franceschi of Julius Baer’s Next Generation research team. “Balance sheet shrinkage is not a tailwind for cryptocurrencies.”
To be sure, cryptocurrencies have struggled in the months since last October’s record crash, which saw leveraged positions leaked and Bitcoin plummeted from all-time highs. As a result, investors have lost interest in digital assets and sentiment towards the industry has become fragile.
“We believe this broad decline is primarily driven by large withdrawals from institutional ETFs (exchange traded funds), from which billions of dollars have been flowing out every month since the October 2025 recession,” Deutsche Bank analysts said in a note to clients.
It added that U.S. Spot Bitcoin ETFs saw outflows of more than $3 billion in January, following outflows of approximately $2 billion and $7 billion in December and November, respectively.
“In our view, this robust sell-off indicates that traditional investors are losing interest and overall pessimism towards cryptocurrencies is increasing,” the analysts said.
Broad issues in technology
Bitcoin’s fate has been tied to the broader technology sector for some time. Prices tended to rise, especially on the back of investor enthusiasm for artificial intelligence.
This week’s global software stock sell-off has accelerated the decline in the value of Bitcoin, Ether and other tokens.
Market observers are beginning to wonder if this decline is the beginning of a more rapid correction.
“Concerns are growing around crypto miners and that they may consider forced liquidations if prices continue to fall, potentially leading to a vicious cycle,” Jefferies strategist Mohit Kumar said in a note.
“Our view on cryptocurrencies has always been that they are only a small part of an overall portfolio. However, they are also an asset class that is heavily owned, especially by retail investors, which increases the overall market risk,” Kumar said.
