Bitcoin plunged below $60,000 Friday, erasing all post-election gains and marking its sharpest decline since the 2022 FTX collapse. The cryptocurrency shed more than 50% from its record high of $126,080 set in early October 2025, wiping out roughly $2 trillion from the broader digital asset market.
Market sentiment hits record lows
The Crypto Fear & Greed Index cratered to 5—its lowest ever since launching in June 2023—signaling “extreme fear” across markets. Ethereum tumbled below $1,900, down 38% year-to-date, while total liquidations reached $2.67 billion in 24 hours, with long positions accounting for $2.31 billion.
“Bitcoin’s decline resembles a perfect storm of leverage unwinding and sentiment-driven selling,” said Vincent Liu, CIO of Kronos Research.
Bessent’s testimony sparks panic
The rout accelerated after Treasury Secretary Scott Bessent testified Wednesday that the government lacks authority to intervene in crypto markets. “I do not have the authority to do that,” Bessent told Congress, dashing hopes for federal support.
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Strategy (formerly MicroStrategy), the largest corporate Bitcoin holder, reported a $12.4 billion Q4 net loss on its 713,502 BTC holdings—now underwater with an average purchase price of $76,000 per coin. Shares plunged 17% to $107, down 70% year-over-year. Executive chairman Michael Saylor’s response? A single social media post: “HODL.”
ETF outflows and hawkish Fed fears
Spot Bitcoin ETFs saw $272 million in net outflows, shrinking assets to $97 billion. BlackRock’s iShares Bitcoin Trust bucked the trend with $60 million in inflows, but others hemorrhaged funds.
Prospects of Kevin Warsh as the next Fed chair added pressure. Dubbed a hawk, Warsh’s potential leadership could shrink the Fed balance sheet, spooking risk assets despite his past nod to Bitcoin as “the new gold” for younger investors.
Analysts diverge on what’s next: some see extreme fear as a contrarian buy signal, while others brace for deeper pain.
