Bitcoin slump triggers $500B crypto market wipeout

Nearly half a trillion dollars has been erased from the cryptocurrency market in less than a week as a selloff led by Bitcoin accelerated sharply.

Total crypto market capitalization has fallen by about $467.6 billion since Jan. 29, according to data from CoinGecko, News.Az reports, citing Bloomberg.

Bitcoin on Tuesday slid to its lowest level since US President Donald Trump won re-election in early November 2024, an event that had initially raised expectations of a more crypto-friendly policy environment.

The world’s largest cryptocurrency dropped to a 15-month low of $72,877 in the United States before recovering some losses on Wednesday. It was trading around $76,600 at 6:50 a.m. in London.

Despite the presence of a pro-crypto White House and growing institutional adoption, Bitcoin has fallen roughly 40% since surging to a record high in early October. The latest downturn follows a severe wave of liquidations on Oct. 10, when about $19 billion in leveraged token positions were wiped out — a shock from which the broader crypto market has yet to fully recover.

The declines come amid a volatile week across global financial markets that also saw sharp swings in gold and silver prices. While precious metals attracted buyers on Tuesday after recent losses, cryptocurrencies failed to find similar support. Bitcoin and US equities moved lower as escalating tensions between the United States and Iran pushed investors toward traditional safe-haven assets.

Bitcoin’s sharp fall has renewed questions over its role as “digital gold,” as it has not behaved like a safe haven during a period of heightened geopolitical uncertainty. Investor Michael Burry warned this week that Bitcoin has been exposed as a purely speculative asset, arguing it has failed to establish itself as a hedge comparable to precious metals.

In the past 24 hours alone, more than $700 million worth of bullish and bearish cryptocurrency positions have been liquidated in the perpetual futures market. That brings total liquidations since Jan. 29 to more than $6.67 billion, according to data from CoinGlass.

Meanwhile, flows into US-listed Bitcoin exchange-traded funds have remained volatile. After recording about $562 million in net inflows on Monday, the group saw $272 million in net outflows on Tuesday, according to data compiled by Bloomberg.

News.Az 

By Nijat Babayev