💥 Crypto Bloodbath: Nearly $470 Billion Vanishes in Days as Bitcoin’s “Digital Gold” Myth Cracks

The crypto market has been hit by a brutal reality check.

In less than a week, nearly half a trillion dollars has evaporated from digital assets, as a relentless selloff — led by Bitcoin — ripped through an industry that had entered 2025 riding optimism, political tailwinds, and institutional hype.

According to CoinGecko data, the total crypto market capitalization has collapsed by $467.6 billion since Jan. 29, marking one of the sharpest drawdowns in recent memory.

At the center of the storm: Bitcoin.

On Tuesday, Bitcoin sank to $72,877, its lowest level since Donald Trump’s re-election victory in early November 2024, a moment that initially ignited hopes of a new, crypto-friendly era in Washington.

While the world’s largest cryptocurrency managed a modest rebound on Wednesday — trading near $75,900 in New York — the damage is undeniable.

Bitcoin is now down roughly 40% from its record high reached in early October, despite a White House signaling regulatory openness and growing institutional participation.

The drop has left investors asking an uncomfortable question: What went wrong?

The roots of the collapse trace back to Oct. 10, when a violent liquidation cascade wiped out $19 billion in leveraged crypto bets in a single day. That shock fractured market confidence — and the crypto ecosystem never fully regained its footing.

Since then, volatility has ruled.

“In the sequence of lower local highs and lows, it’s clear that selling on the rise still dominates,” said Alex Kuptsikevich, chief market analyst at FxPro. “Any rebound so far looks more like relief than recovery.”

That pattern continued this week, as sellers returned at every sign of strength.

The selloff unfolded alongside a turbulent week across global markets, driven by rising tensions between the US and Iran. Traditionally, such moments push investors toward safety — and that’s exactly what happened.

Gold and silver, after early weakness, found buyers.

Crypto did not.

Bitcoin fell alongside US equities, undermining the long-held narrative that it functions as “digital gold.” Instead of acting as a hedge, it traded like a high-risk speculative asset — and critics noticed.

Investor Michael Burry, famed for predicting the 2008 housing crash, delivered a blunt verdict this week: Bitcoin has failed to prove itself as a safe haven comparable to precious metals.

The pressure intensified in derivatives markets.

Over the past 24 hours alone, more than $700 million in bullish and bearish crypto bets were liquidated in perpetual futures trading, according to CoinGlass.

Since Jan. 29, total liquidations have ballooned to $6.67 billion, a staggering figure that highlights just how overextended traders had become.

As leverage unwound, price drops accelerated — feeding a vicious cycle of forced selling.

Even the once-reliable support from institutional investors has started to wobble.

US-listed Bitcoin exchange-traded funds saw $562 million in net inflows on Monday, only to reverse sharply a day later, with $272 million pulled out on Tuesday, according to Bloomberg data.

The whipsaw action underscores a market gripped by uncertainty, where conviction appears fleeting and sentiment shifts by the hour.

Perhaps the most telling observation came from Michael Novogratz, CEO of Galaxy Digital, who reflected on the changing psychology of Bitcoin investors.

“For a long time, there was a tremendous amount of near-religious belief in holding Bitcoin no matter what,” Novogratz said on an earnings call. “And somehow that virus — that fever — broke. And you started seeing some selling.”

That shift may be the most important signal of all.

Bitcoin entered this year backed by political optimism, institutional legitimacy, and a narrative of inevitability. Yet in the face of geopolitical stress, tightening liquidity, and mass liquidations, those pillars cracked.

Nearly $470 billion has disappeared. Billions in leverage have been erased. And the idea of Bitcoin as a crisis hedge is once again under scrutiny.

For now, the market isn’t asking how high crypto can go —
it’s asking how much further it can fall.