The cryptocurrency market has just wrapped up one of its toughest weeks in recent years, seeing a dramatic sell-off that wiped out approximately $390 billion in value. According to TradingView data, the total market capitalization now stands just above $2 trillion, much lower than the October peak of about $4.2 trillion, marking a steep decline that highlights the recent turbulence.
Steep declines for BTC and ETH
This week, Bitcoin plunged by 17.3 percent and Ether fell by 22 percent. Both leading cryptocurrencies experienced their sharpest weekly drop since November 2022, when the collapse of the FTX exchange triggered widespread panic. Although there was some mild stabilization on Saturday, Bitcoin was trading just above $60,000 and Ether hovered near $1,550 by the end of the week.
The weekly downturn in Bitcoin and Ether was among the steepest since November 2022.
The sell-off was not confined to major cryptocurrencies. Derivatives markets were hit by some of the largest liquidations of the year. According to CoinGlass, nearly $7 billion worth of leveraged positions in digital assets were closed over the week, with $5.7 billion of that coming from long positions placed on the expectation of price increases. The most severe liquidations occurred on Monday and Friday.
Strategy sales and ETF outflows fueled pressure
Several negative developments coincided to drag the market lower. At the start of the week, Strategy—the largest institutional holder of Bitcoin—announced it had sold Bitcoin for the first time in nearly four years. While the sale was limited to just 32 BTC (about $2.5 million), the move unsettled investors. Michael Saylor’s company, previously known as MicroStrategy, has long been a cornerstone of demand in the market, and any sign of selling sparked anxiety among participants.
Vetle Lunde, an executive at K33 Research, pointed out that some of the outflows from Bitcoin ETFs could signal a broader shift of capital from crypto to artificial intelligence investments.
Investors also began to question whether Strategy might need to sell more Bitcoin in the near term to cover its growing preferred share obligations. During the same period, capital continued to exit Bitcoin ETFs. Vetle Lunde, head of K33 Research, suggested these outflows may reflect a capital shift from cryptocurrencies toward AI-focused investment opportunities.
Mini glossary: A Bitcoin ETF is an exchange-traded fund that allows investors to access products tied to Bitcoin’s price without holding the asset directly. Spot Bitcoin ETFs aim to track Bitcoin’s price by buying and storing it on behalf of investors.
Macroeconomic data and rate expectations deepen losses
In the latter half of the week, macroeconomic headwinds intensified. On Friday, U.S. employment data came in above expectations, prompting investors to reassess their predictions for the next move from the Federal Reserve. Earlier in the year, markets were banking on interest rate cuts, but persistently high inflation has made the prospect of another rate hike a more prominent topic of discussion.
Bond yields in the U.S. moved higher in response. Meanwhile, the Nasdaq 100 index ended the week with its worst day since tariff-triggered sales in April 2025, halting the strong rally that had fueled optimism on Wall Street this year. With AI-related stocks climbing to record highs and growing anticipation for IPOs from companies like OpenAI, Anthropic, and SpaceX, investor attention shifted further away from crypto and toward other sectors.
The weekend brought a measure of calm, temporarily pausing the sell-off. However, whether the drop marks a firm bottom or signals just another phase in a broader downturn remains to be seen. Much depends on the movement of bond yields, monetary policy expectations, and the flow of capital toward AI investments.
