LONDON, Feb 5, 2026, 11:48 GMT
- Bitcoin dropped to about $70,000 following an earlier fall close to $69,000, marking its lowest point since November 2024
- Analysts warn of tightening liquidity and note significant withdrawals from spot crypto ETFs
- Ether held close to $2,100 while investors moved into traditional safe havens
Bitcoin plunged as much as 8% to roughly $69,000 on Thursday, then bounced back to around $71,000, dragged down by a tech-led sell-off in Asia that rattled risk assets. The drop followed a statement from U.S. Treasury Secretary Scott Bessent, who told lawmakers he lacks the authority to compel banks to purchase crypto assets.
Bitcoin’s plunge has erased all gains made since U.S. President Donald Trump’s 2024 re-election, wiping out investor optimism that Washington might loosen digital asset regulations. The cryptocurrency was trading near $70,900 at 0430 GMT, down almost 20% so far this year after hitting a peak above $127,000 in October 2025, according to Al Jazeera.
Bitcoin slipped about 2% in early European trading, hitting $70,052 earlier in Asia — its lowest since November 2024, according to Reuters. Analysts are blaming the selloff on Kevin Warsh, Trump’s pick to lead the Federal Reserve, who’s expected to shrink the Fed’s bond holdings that influence liquidity. “A smaller balance sheet is not going to provide any tailwinds for crypto,” said Manuel Villegas Franceschi from Julius Baer. Deutsche Bank analysts also flagged over $3 billion in U.S. spot bitcoin ETF outflows in January. Reuters
ETF flows reflected the selloff. According to data from Farside Investors, U.S.-listed spot bitcoin ETFs—those holding bitcoin directly—saw net outflows of $544.9 million on Feb. 4. BlackRock’s iShares Bitcoin Trust (IBIT) accounted for $373.4 million of that. Spot ether ETFs also experienced net outflows, totaling $79.4 million that day.
Washington did little to ease tensions. A White House meeting this week couldn’t resolve the deadlock between banks and crypto companies over a market-structure bill, Reuters reported. The dispute hinges on whether stablecoin issuers should be permitted to offer interest-like rewards. Stablecoins are cryptocurrencies pegged to assets such as the U.S. dollar.
The crypto selloff is mirroring a wider risk-off mood. U.S. stocks dropped Tuesday as bitcoin slipped just below $73,000. At the same time, gold and silver saw gains, according to a CNN report shared by CNN Newsource. “Most investors currently view gold as the dominant store-of-value asset,” Gerry O’Shea, head of global market insights at Hashdex, said in an email. KESQ
Certain strategists now view the market less as an isolated ecosystem and more as a leveraged risk play. Wenny Cai from SynFutures noted that capital is shifting toward “traditional safe havens like gold,” according to Barron’s.
The downturn is hitting corporate holders hard. Strategy, previously MicroStrategy, saw bitcoin dip below the average purchase price of its stash briefly this week, MarketWatch reports. The firm holds over 700,000 bitcoins.
The path ahead remains uncertain. Warsh’s nomination must clear confirmation hurdles. ETF flows can reverse on a dime in choppy markets. Crypto prices often bounce back after bouts of forced selling, particularly near key thresholds like $70,000.
Traders are eyeing whether bitcoin can stay above that level. If it slips below, the market would dive into zones unseen since late 2024. Ether is also feeling the heat, hovering near $2,100 as investors rethink how much liquidity the next round of U.S. policy will inject.
