When you’re your bitcoin portfolio and seeing crimson, likelihood is you’re witnessing one of many quickest unravellings in crypto historical past. Bitcoin’s slide has been brutal. After peaking at a euphoric US$126,000 in October 2025, Bitcoin has entered a relentless free fall, touching lows of US$59,000 to US$60,000 in February 2026.
However why is Bitcoin falling? Buyers are panic-searching for solutions, looking for far and broad. Is that this a buy-the-dip second or the beginning of a multi-year crypto winter?
On this breakdown of the good Bitcoin Freefall from 2025 to 2026, we cowl key occasions resulting in Bitcoin’s newest fall and important insights from Zhong Yang Chan, Head of Analysis at CoinGecko, to seek out out if the worst is over.
A US$19 Billion Washout and the Warsh Paradox
Whereas the latest volatility has captured headlines, the roots of the present dislocation started months earlier.
Again in early October 2025, Bitcoin was buying and selling at an euphoric all-time excessive of roughly US$126,000. Nonetheless, when President Trump introduced threats of 100% tariffs on Chinese language imports in October 2025, it triggered an enormous “liquidity shock” throughout world markets, hitting danger property concurrently.
Over a number of days, the market witnessed an US$18+ billion crypto sellout by way of liquidations, which the market has but to get better from.
“Since then, BTC has slipped from its all-time excessive of US$126,000 on 6 October 2025 to US$87,000 by 1 Jan 2026,” Zhong shares.
The subsequent leg of the decline got here in late February 2026, when President Trump introduced the nomination of Kevin Warsh as the following Federal Reserve Chairman. This transfer signalled a possible regime shift in how Bitcoin is traded, and acted as a second hammer blow.
Analysts have shared with Reuters that having Warsh on the helm may result in a smaller Fed stability sheet, which poses a danger for property like cryptocurrencies that thrive on liquidity.
Warsh reportedly tends to favour increased rates of interest and inflation considerations. Zhong shares additional, saying,
“His (Warsh’s) nomination triggered a simultaneous decline throughout Gold, Silver, US equities and crypto. BTC’s drastic dip displays a loss in conviction from sellers, as many of the promoting has come from the spot market. However the present rebound may point out {that a} flooring has been discovered, and merchants are cautiously rebuilding confidence and assist for BTC.”
As of 10 February 2026, the bitcoin market is now close to US$70,000.
The latest bitcoin rebound has been fuelled by a stabilisation in tech shares and quick overlaying from merchants who had wager on an additional collapse, amongst different components.
Nonetheless, the structural harm stays. The query on each investor’s thoughts is whether or not this can be a real restoration or a “useless cat bounce” earlier than the following leg down.
Michael Burry, an investor who’s famend for betting in opposition to America’s housing market through the 2008 monetary disaster, has issued a stark warning for miners ought to it fall beneath US$50,000.
Burry stated that miners will go bankrupt and be pressured to promote, and added that tokenised metallic futures may collapse right into a black gap with no patrons.
Whereas his remarks mirror broader market anxiousness, in addition they underscore how tightly Bitcoin has grow to be linked to liquidity situations throughout danger property.
Digital Asset Treasury Corporations Enter a Stress Take a look at
By late January and early February 2026, the harm unfold to the fairness markets, making a correlation disaster. The “software-mageddon” noticed main AI and software program shares plummet as traders started to query the return on funding for large capital expenditures in synthetic intelligence.
The S&P 500 software program and companies index shed roughly US$1 trillion in market worth, dragging NASDAQ down with it.
Now, as institutional traders maintain vital quantities of tech equities and crypto by way of ETFs, the 2 asset courses have grow to be glued collectively. So when hedge funds confronted margin calls on their tech portfolios, they bought their most liquid property to lift money, and sometimes that asset was Bitcoin.
This correlation meant that as AI shares crashed, they dragged Bitcoin down in tandem, shattering the narrative that crypto would act as a haven throughout an fairness market correction.
In his commentary, Zhong shares that Digital Asset Treasury Corporations (DATCos) are dealing with an unprecedented take a look at of conviction proper now.
Primarily based on CoinGecko’s Crypto Treasuries tracker, most DATCos are at present dealing with vital paper losses on their crypto holdings, and their share costs now commerce beneath the 1.0 mNAV degree, which Zhong explains implies that their enterprise worth is now beneath the worth of their crypto holdings.
When posed on whether or not company treasury “diamond palms” are being examined in a method that would create danger for BTC, Zhong had extra to share.
The excellent news, he says, is that most of those corporations have been funded by fairness issuances, with solely a comparatively small debt aspect. Subsequently, there shouldn’t be any cases of force-selling to pay down debt.
“Nonetheless, we’re already seeing consolidation occur throughout the DATCo area (Try buying Semler Scientific), and sure DATCos are already pivoting to different companies to outlive (ETHZilla promoting ETH to pivot into aeronautics and tokenization). Within the meantime, the 2 largest DATCos, Technique and BitMine Immersion, are nonetheless usually buying crypto by way of fairness issuances, demonstrating their continued dedication to build up extra crypto, Zhong shares.
Stablecoins because the Market’s Ready Room
Whereas Bitcoin has struggled, stablecoins have quietly emerged as certainly one of crypto’s strongest progress tales, with market capitalisations reaching all-time highs and signalling a transparent shift in investor behaviour.
Fairly than exiting the ecosystem solely, capital seems to be pausing on-chain, reflecting a deliberate wait-and-see method amid heightened volatility.
Zhong shares that stablecoins have been a significant vivid spot for crypto in 2025, particularly with the passing of the US GENIUS Act, which created a pathway for the authorized issuance of USD stablecoins.
“Since then, we’ve got seen quite a few bulletins from TradFi gamers within the US indicating their curiosity in leaping into the fray to both difficulty their very own stablecoin or combine stablecoins into their respective companies. On the identical time, crypto has gone multi-asset, with plentiful avenues to commerce shares and commodities on-chain, that means that traders needn’t withdraw their capital to change asset courses.”
He continues, saying that the sturdy sustained progress in stablecoins displays not simply continued investor curiosity within the crypto trade, but in addition the crypto trade’s enlarged scope to maintain capital on-chain, in addition to the elevated and impending adoption of blockchains as fee rails.
Whereas there was a slight dip of about US$4 billion in complete stablecoin market cap in latest days, Zhong shares that they solely anticipate this section of the market to proceed to develop as extra issuers soar into the fray and extra use circumstances get constructed out.
Whereas volatility is prone to persist, the continued conviction of enormous treasury holders and the regular rise of stablecoins counsel that capital is repositioning.
Whether or not this marks the top of the downturn or merely an intermission will rely much less on sentiment, and extra on how world liquidity situations evolve within the months forward.
Featured picture edited by Fintech New Singapore based mostly on photos by tohamina and Dmitry Akreev on Freepik
