Crypto Downturn Shatters Billions in Wealth
The cryptocurrency market is reeling after a brutal sell‑off wiped out massive value, erasing more than $1 trillion from global market capitalization.
On Monday, Bitcoin (BTC) plunged as much as 8%, sliding to around $83,824 — its steepest drop in recent months. Ethereum (ETH) also fell, dropping roughly 10% to as low as $2,719.
The crash triggered the liquidation of nearly $1 billion in leveraged crypto positions, as traders using borrowed funds were forced out en masse. Smaller, less liquid tokens fared worse: many saw dramatic declines — some losing more than half their value — as investor sentiment turned sharply negative.
Market-wide pressure also came from institutional players and so-called “treasury firms” that had loaded up on crypto earlier in 2025. With prices falling, these firms now face the risk of being underwater — holding assets worth far less than what they paid.
One of the hardest-hit was Strategy (formerly known as MicroStrategy), a major corporate buyer of Bitcoin. The company announced a new $1.44 billion cash reserve to protect its dividend payouts. It revised its full‑year forecast — warning that it could swing from a potential $6.3 billion profit to a $5.5 billion loss.
The sell-off has been fueled by a confluence of macroeconomic factors: global risk‑off sentiment, concern about interest‑rate shifts — particularly overseas — and faltering confidence in stablecoins like Tether, which recently faced a rating downgrade.
As fear spreads, many investors are exiting even more stable cryptopositions (like Bitcoin), cutting exposure to high‑risk tokens, and shifting capital into traditional safe‑havens such as bonds or gold. According to analysts, if the decline continues, Bitcoin could test support near $80,000 — or possibly lower.
Still, some experts caution that while the current slump is painful, this may reflect a “market correction” or a broader re‑pricing — not necessarily the end of crypto. Whether investors regain confidence likely depends on macroeconomic stability, regulatory developments, and renewed institutional interest.
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