$2 trillion wiped out in global crypto market since last October and $800 billion lost last month?
Since October 2024, the global cryptocurrency market has lost $2 trillion in value. In the past month alone, approximately $800 billion has been wiped out. Bitcoin fell to $63,295.74, its lowest since October 2024, while Ether also declined sharply. Large institutional outflows, selling by retail investors, and declines in tech stocks and precious metals contributed to the losses. Data from CoinGecko and CoinGlass shows that leveraged positions in Bitcoin and other cryptocurrencies were liquidated rapidly. The cumulative effect of these factors has intensified market volatility and reduced investor confidence across the crypto sector.
Global cryptocurrency market fall explained
The global cryptocurrency market has lost $2 trillion in value since October 2024. In the past month alone, around $800 billion has been wiped out. Bitcoin fell sharply to $63,295.74, the lowest level since October 2024.
Bitcoin plummets, driving crypto market tumble
Bitcoin’s decline accelerated on Thursday, falling 12.6% to $63,525. Roughly $1 billion in bitcoin positions were liquidated within 24 hours. Ether, the second-largest cryptocurrency, dropped more than 13% to $1,854. Bitcoin has fallen 28% this year, while Ether is down nearly 38%.
Factors behind the $2 trillion crypto loss
Experts attribute the crypto market slump to several factors. Weakening risk sentiment, volatility in gold and silver, and a broad selloff in tech stocks contributed. Gold and silver prices became volatile due to leveraged buying and speculative flows.
Market reaction to Warsh selection
The selection of Kevin Warsh as the next Federal Reserve chair by former President Donald Trump also affected crypto prices. Analysts say the market fears a hawkish Fed. A smaller balance sheet may remove liquidity support that helped cryptocurrencies rise in the past.
Institutional outflows intensify losses
Deutsche Bank analysts report massive withdrawals from institutional crypto ETFs since last October. U.S. spot bitcoin ETFs saw outflows of more than $3 billion in January. Previous months recorded outflows of $2 billion and $7 billion. Steady selling indicates reduced investor interest and growing pessimism.
Broader tech sector weakness
Bitcoin and other cryptocurrencies have tracked tech stock trends. This week, software stock declines contributed to the crypto slide. Analysts warn forced liquidations by crypto miners could create a vicious cycle, further pushing prices down.
Analysts insights and market outlook
Nic Puckrin, co-founder of Coin Bureau, stated the crypto market is in “full capitulation mode.” Jefferies strategist Mohit Kumar warned that crypto should remain a small part of portfolios due to its risk and retail ownership. Analysts see months of adjustment ahead.
What should investors do now?
Investors should review their crypto exposure carefully. Analysts recommend keeping digital assets as a small portion of the overall portfolio due to high risk. Avoid leveraged trading and monitor market trends closely. Selling during panic phases may increase losses, while gradual, informed adjustments can reduce risk. Institutional ETFs continue to see outflows, signaling caution. Investors should focus on risk management, diversify holdings, and consider long-term strategies rather than reacting to short-term price swings. Staying informed about Fed policies, tech sector performance, and cryptocurrency fundamentals can help in making measured investment decisions.
FAQs
Q1: Why did the crypto market lose $2 trillion since last October?
The loss comes from Bitcoin and Ether price drops, tech stock weakness, volatility in metals, and large withdrawals from institutional ETFs.
Q2: Will cryptocurrencies recover from recent losses?
Recovery depends on market sentiment, Fed policies, and investor interest. Analysts say adjustment may take months, not weeks.
