{"id":2863,"date":"2026-02-06T17:12:18","date_gmt":"2026-02-06T17:12:18","guid":{"rendered":"https:\/\/finzexpert.com\/blog\/bitcoin-gets-slashed-in-half-whats-behind-the-cryptos-existential-crisis\/"},"modified":"2026-02-06T17:12:18","modified_gmt":"2026-02-06T17:12:18","slug":"bitcoin-gets-slashed-in-half-whats-behind-the-cryptos-existential-crisis","status":"publish","type":"post","link":"https:\/\/finzexpert.com\/blog\/bitcoin-gets-slashed-in-half-whats-behind-the-cryptos-existential-crisis\/","title":{"rendered":"Bitcoin gets slashed in half. What&#8217;s behind the crypto&#8217;s existential crisis"},"content":{"rendered":"\n<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\">Bitcoin<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> tumbled toward $60,000 this week as investors reassessed its utility. And while there isn&#8217;t one clear catalyst driving the bloodbath, one thing is clear: the crypto market is in crisis.\u00a0<\/p>\n<p>&#8220;There&#8217;s nothing going on in the marketplace that should have necessitated this type of a crash,&#8221; Anthony Scaramucci, founder and managing partner of alternative investment firm SkyBridge, told CNBC. &#8220;And so I think that&#8217;s made people, frankly, more fearful. &#8230; You have to ask yourself, &#8216;is it over for bitcoin?'&#8221;<\/p>\n<p>Bitcoin fell as low as $60,062 on Thursday, bringing it to its lowest level since Oct. 11, 2024. That&#8217;s more than 52% off from its record high of $126,000 hit in early October 2025.\u00a0\u00a0<\/p>\n<p>The previous session marked one of bitcoin&#8217;s bloodiest ever, with the token shedding more than 15% on the day. Its daily relative strength index fell to 18, putting the asset in extremely oversold territory. As of Thursday, other digital assets like <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-2\">ether<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-3\">solana<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> were also down 24%\u00a0 and 26% for the week to date, respectively \u2014 a sign investors&#8217; confidence in the entire crypto market is faltering.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">Bitcoin bounces, but losses loom large<\/h2>\n<div class=\"group\">\n<p>Bitcoin was rebounding on Friday, with the token last trading at $69,631.97, up more than 9% on the day.<\/p>\n<p>But, its recent drawdown has prompted investors to re-evaluate its utility, including its role as a digital currency or as a store of value. Simultaneously, institutional appetite for the flagship crypto appears to be waning as spot bitcoin exchange-traded funds record outsized outflows, threatening to drive bitcoin deeper into the red.\u00a0<\/p>\n<p>&#8220;This time is markedly different from other bear markets, however, in that it&#8217;s not in response to a structural blowup,&#8221; Jasper De Maere, desk strategist at crypto market-making firm Wintermute, said in a statement shared with CNBC. &#8220;It&#8217;s a fundamentally macro-driven deleveraging tied to positioning, risk appetite and narratives rather than systemic failures within crypto itself.&#8221;<\/p>\n<\/div>\n<div>\n<div class=\"Collapsible-proliveCollapsableContainer\" role=\"button\" tabindex=\"0\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"256\" height=\"256\" viewbox=\"0 0 256 256\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" preserveaspectratio=\"xMinYMin\" class=\"Collapsible-stockChartIcon\"><title>Stock Chart Icon<\/title><desc>Stock chart icon<\/desc><g transform=\"translate(1.4065934065934016 1.4065934065934016) scale(2.81 2.81)\"><path d=\"M 87.994 0 H 69.342 c -1.787 0 -2.682 2.16 -1.418 3.424 l 5.795 5.795 l -33.82 33.82 L 28.056 31.196 l -3.174 -3.174 c -1.074 -1.074 -2.815 -1.074 -3.889 0 L 0.805 48.209 c -1.074 1.074 -1.074 2.815 0 3.889 l 3.174 3.174 c 1.074 1.074 2.815 1.074 3.889 0 l 15.069 -15.069 l 14.994 14.994 c 1.074 1.074 2.815 1.074 3.889 0 l 1.614 -1.614 c 0.083 -0.066 0.17 -0.125 0.247 -0.202 l 37.1 -37.1 l 5.795 5.795 C 87.84 23.34 90 22.445 90 20.658 V 2.006 C 90 0.898 89.102 0 87.994 0 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 65.626 37.8 v 49.45 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 23.518 L 65.626 37.8 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 47.115 56.312 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 42.03 L 47.115 56.312 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 39.876 60.503 c -1.937 0 -3.757 -0.754 -5.127 -2.124 l -6.146 -6.145 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 59.844 C 41.952 60.271 40.933 60.503 39.876 60.503 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 22.937 46.567 L 11.051 58.453 c -0.298 0.298 -0.621 0.562 -0.959 0.8 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 48.004 L 22.937 46.567 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><\/g><\/svg><\/p>\n<div class=\"Collapsible-proLivePlayerCloseOrExpand\"><\/div>\n<\/div>\n<p><iframe title=\"Bitcoin prices over the past year\" src=\"https:\/\/www.cnbc.com\/appchart?symbol=BTC.CM%3D&amp;range=1Y&amp;type=mountain&amp;embedded=true&amp;$DEVICE$=undefined\" height=\"460\" scrolling=\"no\" loading=\"lazy\" style=\"border:0;width:100%\"><\/iframe><\/p>\n<p>Bitcoin prices over the past year<\/p>\n<\/div>\n<div class=\"group\">\n<p>Over the past few months, investors have grown increasingly skeptical of efforts to recast bitcoin as &#8220;digital gold,&#8221; or an alternative to traditional safe havens such as <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-5\">gold<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span>. Bitcoin is down 28% over the past 12 months, while gold is up 72% during the same period \u2014 a testament to the latter&#8217;s utility as a hedge against macro risks. <\/p>\n<p>Conversely, bitcoin has often traded down alongside other risk-on assets such as equities amid periods of high macroeconomic and geopolitical uncertainty, raising doubts about its utility as a safe haven. Nearly a week after Trump&#8217;s &#8220;liberation day&#8221; tariff announcement on April 2, 2025, bitcoin had fallen about 10% to below $80,000, while the <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-6\">S&amp;P 500<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> had declined roughly 4%.\u00a0<\/p>\n<p>Separately, investors are also reassessing the extent to which financial institutions, treasury firms and governments are willing to adopt bitcoin \u2014 a major catalyst for the token in recent years.\u00a0<\/p>\n<p>Large institutional outflows are mounting as investors brace for bitcoin to go lower, thinning liquidity for the token, according to a recent analyst note from Deutsche Bank.<\/p>\n<p>Those outflows are also noticeable among spot bitcoin ETFs in recent months, according to the investment firm. The funds have seen outflows of more than $3 billion in January, in addition to roughly $2 billion last December and about $7 billion last November.<\/p>\n<p>Additionally, a swath of <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-7\">Strategy<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> copy-cats that emerged over the past year or so have slowed or paused their bitcoin purchases amid the digital asset&#8217;s correction. <\/p>\n<p>Finally, traders have acknowledged that long-time efforts to market bitcoin as an alternative to fiat currencies have largely faded. While Steak &#8216;n Shake and Compass Coffee have rolled out support for bitcoin payments in recent years, initiatives to make the asset a form of payment have largely died, particularly as interest in dollar-pegged stablecoins grows, according to Bitwise&#8217;s Ryan Rasmussen.\u00a0<\/p>\n<p>&#8220;We&#8217;re seeing Wall Street adopt stablecoins because it is a fundamental transformation of the way payments work, and bitcoin is just a different asset. It&#8217;s not meant for that today,&#8221; Rasmussen said, arguing that the token&#8217;s purpose has evolved from that of a currency to a decentralized, non-governable store of value. &#8220;I&#8217;ve never paid for coffee or a sandwich with Bitcoin, and I never will.&#8221;<\/p>\n<p>And beyond those more immediate concerns, investors are also increasingly worried that bitcoin&#8217;s underlying network could be hacked, driving the token to zero.\u00a0<\/p>\n<p>&#8220;It certainly is a risk that is seeing more attention from investors as they&#8217;re getting more worried about [it], and I think you&#8217;re seeing a little bit of that risk priced into bitcoin,&#8221; Rasmussen said.<\/p>\n<p>He noted that Bitwise has allocated funds toward efforts to mitigate the threat from quantum computing.<\/p>\n<p>Nevertheless, traders&#8217; appetite for bitcoin has largely dwindled, denting its price. That&#8217;s true even as long-time believers are still proudly betting on bitcoin, despite of the charts and the naysayers.\u00a0<\/p>\n<p>&#8220;I believe that the story is intact,&#8221; said Scaramucci, adding that he bought bitcoin for his fund on Thursday. &#8220;But, I don&#8217;t have a crystal ball. \u2026 Who the hell knows.&#8221;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin tumbled toward $60,000 this week as investors reassessed its utility. And while there isn&#8217;t one clear catalyst driving the bloodbath, one thing is clear: the crypto market is in crisis.\u00a0 &#8220;There&#8217;s nothing going on in the marketplace that should have necessitated this type of a crash,&#8221; Anthony Scaramucci, founder and managing partner of alternative [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2864,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[321,2782,2780,2781,2779,201],"class_list":["post-2863","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan","tag-bitcoin","tag-crisis","tag-cryptos","tag-existential","tag-slashed","tag-whats"],"_links":{"self":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/posts\/2863","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/comments?post=2863"}],"version-history":[{"count":0,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/posts\/2863\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/media\/2864"}],"wp:attachment":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/media?parent=2863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/categories?post=2863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/tags?post=2863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}