The market has lost 30% since the start of the year: what’s happening with the crypto market
5 February 20:45
On February 5, Bitcoin, the world’s largest cryptocurrency, fell by more than 3% during Asian trading and hovered near the key psychological level of $70,000, dropping to $70,052.
This is Bitcoin’s lowest level since November 2024, according to Reuters , as reported by "Komersant Ukrainian".
The second-largest crypto asset by market capitalization— Ethereum —also fell by nearly 2%, to $2,086. Earlier this week, its price briefly dipped below $2,000, marking its steepest decline since May of last year.
How serious is the decline?
The current decline is part of a broader negative trend:
- Bitcoin has lost more than 7% in just one week;
- since the start of the year, its decline has reached nearly 20%;
- Ether has fallen by nearly 30% since the start of the year .
Analysts note that pressure on the crypto market is intensifying not only due to technical factors but also macroeconomic expectations.
The Fed factor: a political signal for the markets
One of the catalysts for the sharp decline was the announcement of Kevin Warsh’s nomination as the next chair of the U.S. Federal Reserve.
Markets expect that if appointed, he may:
- adopt a more hawkish monetary stance;
- accelerate the reduction of the Fed’s balance sheet.
For risky assets—particularly cryptocurrencies—this signals lower liquidity and more challenging financing conditions.
Analysts at Deutsche Bank believe that massive redemptions from institutional crypto funds were the key factor behind the decline.
“We believe this broad decline is primarily driven by massive outflows from institutional ETFs. Since October 2025, when the decline began, billions of dollars have been withdrawn from these funds every month,” the bank’s analysts noted.
According to their data:
- in January, over $3 billion was withdrawn from U.S. spot Bitcoin ETFs;
- in December — about $2 billion;
- in November — nearly $7 billion.
A signal from traditional investors
According to Deutsche Bank experts, these figures are systemic in nature:
“In our view, these persistent sell-offs indicate that traditional investors are losing interest, and overall pessimism regarding cryptocurrencies is growing,” analysts emphasize.
This means that the crypto market is receiving less and less support from large institutional players, who were one of the drivers of growth in 2023–2024.
The decline in cryptocurrencies is occurring against the backdrop of:
- expectations of tighter U.S. monetary policy;
- a shift of capital toward safe-haven assets;
- growing interest in gold—in particular, it was reported in late January that Tether’s gold reserves had increased by more than $5 billion, indicating a shift in investment priorities.
