Crypto catches a cold

As snow piles up outside, the crypto winter is setting in.

Bitcoin has dropped nearly 50% from its October peak, slipping below $70,000 early this morning—a level it hasn’t traded at since November 2024, completely erasing its gains since President Trump’s election. It fell all the way to $64,490 today, and has dropped 18% this week alone.

For years, crypto advocates pitched bitcoin as a modern safe haven: decentralized, detached from central banks, and a hedge against inflation, often grouped alongside gold. That thesis is breaking down: instead of tracking gold higher amid geopolitical uncertainty and policy volatility, bitcoin has diverged sharply, behaving more like a risk asset. Gold has surged 10.57% in 2026, while so far this year bitcoin is down 27.19%, ether has fallen 36.48%, and solana has dropped 35.79%.

What’s behind bitcoin’s slide?

1. Liquidity and capital flows

US spot-bitcoin ETFs enjoyed huge capital inflows that supported prices through 2025—but now they’re seeing outflows, with institutions turning into net sellers in 2026. The reversal has triggered forced deleveraging: more than $2 billion has been pulled out of bitcoin ETFs this week alone, according to Bloomberg, and over $5 billion has exited the market over the past three months.

2. Fed uncertainty

The prospect of Kevin Warsh taking the helm at the Federal Reserve rattled crypto markets, accelerating the unwind of leveraged bullish positions. While Warsh has signaled support for lower rates, his long-standing focus on shrinking the Fed’s balance sheet has raised concerns about tighter system liquidity, a backdrop that typically pressures speculative assets like bitcoin.

3. Weak retail demand

Bitcoin is losing mindshare as retail traders chase other opportunities, from sports betting and prediction markets to zero-day equity options and higher-yield crypto trades on decentralized platforms. With more ways to speculate, bitcoin is no longer the default outlet for retail risk-taking.

What’s next?

The $70,000 level was a critical line of support in the sand, and a sustained break below it could lower the floor to between $60,000 and $65,000, James Butterfill, head of research at Coinshares, told CNBC.

Until liquidity improves and risk appetite stabilizes, bitcoin is likely to remain vulnerable to further selloffs. But one true believer is sticking with it: earlier today, Michael Saylor, CEO of Strategy, tweeted crypto’s familiar four-letter creed: HODL.

It remains to be seen if anyone actually listens to him.—SY