Crypto investors endured one of their toughest weeks in years as a wave of selling wiped hundreds of billions of dollars from digital asset markets.
Bitcoin fell 17.3% this week while ether fell 22%, putting both assets on track for their biggest weekly declines since November 2022, when the collapse of Sam Bankman-Fried’s FTX exchange sparked a market-wide panic.
Despite stabilizing slightly on Saturday, both assets remained near their lows, with Bitcoin trading just above $60,000 and ether changing hands around $1,550.
Market Losses Spread Everywhere
The damage extended well beyond the two largest cryptocurrencies. The digital assets market lost around $390 billion over the week, leaving the total market capitalization hovering just above $2 trillion, according to TradingView data. That’s less than half of October’s peak of nearly $4.2 trillion.
It’s not just prices that have been affected. Crypto derivatives traders suffered one of the biggest wipeouts this year.
According to CoinGlass data, around $7 billion in leveraged positions were liquidated across digital assets during the week, with Monday and Friday generating the largest bursts. About $5.7 billion were long positions or bullish bets on higher prices.
Several bearish forces converge
The selloff occurred as several bearish forces converged at the same time.
Earlier this week, Strategy, the largest holding company in Bitcoin, revealed that it was selling Bitcoin for the first time in nearly four years. The transaction was negligible — just 32 Bitcoins worth about $2.5 million — but the sale rattled investors who had long viewed Michael Saylor’s company as a perpetual source of demand.
Investors have also begun to wonder whether Strategy might need to sell additional bitcoin to help cover obligations tied to its growing stack of preferred shares.
At the same time, Bitcoin ETFs continued to bleed assets. Vetle Lunde, director of K33 Research, argued earlier this week that some of these outflows reflected a broader rotation of capital from crypto to investments in artificial intelligence.
As AI-related stocks reach record highs and investors anticipate potential IPOs from companies like OpenAI, Anthropic and SpaceX, the opportunity cost of holding Bitcoin has become increasingly difficult for some investors to ignore, Lunde said.
AI discovers cryptographic flaws
Concerns about AI’s ability to reveal flaws in cryptographic protocols have also added to the pressure. Zcash, one of the best-performing cryptos earlier this year, fell more than 40% after researchers used Anthropic’s latest AI model to discover a critical vulnerability in the network’s privacy system.
The final blow came with Friday’s better-than-expected U.S. jobs report, forcing investors to rethink the Federal Reserve’s next move. Markets that earlier this year anticipated rate cuts are now increasingly expecting that the central bank could raise rates if inflation remains stubbornly high.
U.S. Treasury yields jumped, while the Nasdaq 100 suffered its worst day since the tariff-driven sell-off in April 2025, ending a record rally that had fueled much of Wall Street’s enthusiasm this year.
For now, sales appear to have stopped, with traditional markets closed for the weekend and cryptocurrency prices stabilizing on Saturday.
Whether this week’s rout marked a capitulation that often occurs when the market hits lows or whether it is simply the latest episode in a downtrend may depend on the broader macroeconomic context. Rising bond yields, fears of rising rates and continued competition from AI investments and IPOs remain major obstacles to the recovery.
