Crypto investors endured one of their toughest weeks in years as a wave of selling wiped out hundreds of billions of dollars from digital asset markets.
Bitcoin fell 17.3% this week, while ether (ETH) 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 market-wide panic.
Despite a modest stabilization on Saturday, both assets remained close to their lows, with BTC trading just above $60,000 and ETH changing hands around $1,550.
The damage extended far beyond the two largest cryptocurrencies. The digital asset market lost about $390 billion in value during the week, leaving the total market capitalization at just over $2 trillion, according to TradingView data. That’s less than half the peak of nearly $4.2 trillion reached in October.
It wasn’t just the prices that were hit. Crypto derivatives traders suffered one of the biggest wipeouts this year.
About $7 billion in leveraged positions were liquidated across digital assets during the week, according to CoinGlass data, with Monday and Friday delivering the most severe flushes.
About $5.7 billion of these were long positions or bullish bets on higher prices.
Why crypto crashed this week
The selloff came as several bearish forces converged at once.
As of this week, Strategy (MSTR), the largest corporate owner of bitcoin, revealed that it was selling BTC for the first time in nearly four years. The transaction was insignificant — just 32 BTC worth about $2.5 million — but the sale rattled investors who had long seen Michael Saylor’s company as a perennial source of demand.
Investors also began to question whether Strategy might need to sell additional bitcoin to help cover liabilities tied to its growing stack of preferred stock.
At the same time, bitcoin ETFs continued to bleed assets. K33 Research head Vetle Lunde argued earlier this week that some of these outflows reflected a broader rotation of capital away from crypto and into artificial intelligence (AI) investments.
With AI-related stocks pushing to record highs and investors anticipating potential IPOs from companies like OpenAI, Anthropic and SpaceX, the “opportunity cost of holding BTC” has become increasingly difficult for some investors to ignore, Lunde said.
Concerns about AI’s ability to detect flaws in crypto protocols also added to the pressure. Zcash (ZEC), one of the best-performing cryptos earlier this year, fell by more than 40% after researchers used Anthropic’s latest AI model to uncover a critical vulnerability in the network’s privacy system.
The final blow came with Friday’s stronger-than-expected US jobs report, forcing investors to reconsider the Federal Reserve’s next move. Markets that expected interest rate cuts earlier this year now increasingly expect the central bank to raise if inflation remains stubbornly high.
U.S. Treasury yields rose sharply while the Nasdaq 100 suffered its worst day since the April 2025 tariff-driven selloff, snapping a record rally that had fueled much of Wall Street’s enthusiasm this year.
So far, the selling appeared to have stopped with traditional markets closed for the weekend and crypto prices stabilizing on Saturday.
Whether this week’s round marked the capitulation that often comes at market bottoms or was just the latest episode in the downtrend may come down to the broader macro picture. Higher bond yields, fears of interest rate hikes and continued competition from AI investments and IPOs remain key obstacles to the recovery.
