Bitcoin Falls Below $67,000 Erasing 15 Months Of Gains

Panicked investors triggered a massive liquidation event as Bitcoin plummeted below $67,000 for the first time since the previous election. This violent retreat erased 15 months of gains while total crypto market capitalization contracted significantly.

The catastrophic drawdown accelerated on 5 February 2026 across global digital exchanges amid a broader flight from risk assets. Tech-heavy indices on Wall Street mirrored the crypto decline as traders reduced exposure to speculative AI.

President Trump nominated inflation hawk Kevin Warsh to lead the Federal Reserve, sparking intense fears of a restrictive monetary regime. Markets reacted with immediate fervor because the choice signals reduced liquidity and a smaller central bank balance sheet.

Total liquidations topped a record $19 billion as leveraged long positions faced mechanical wipeouts through cascading margin calls today. Consequently, institutional outflows from spot ETFs intensified the selling pressure while gold and silver also suffered sharp corrections.

Bitcoin ETF Holders Maintain Conviction During Pullback

Spot Bitcoin ETF holders are currently facing their largest paper losses since the US products launched in January 2024. Analyst James Seyffart noted on Wednesday that while Bitcoin dropped below $71,000, aggregate outflows remain small compared to previous record inflows. The average investor is now roughly 24% underwater but continues to hold their position despite the four-month downtrend.

Some experts argue that participants are becoming short-sighted by overlooking the asset's 400% gain since early 2022. Preliminary data from Farside Investors shows that net inflows of Bitcoin ETF have only decreased by 12% from their October all-time high. This resilience suggests that institutional players are bracing for long-term recovery rather than exiting during the current period of extreme volatility.

Polymarket Transitions To Native USDC With Circle

Polymarket announced a strategic partnership with Circle this Thursday to integrate native USDC for all on-chain settlement. The prediction market currently utilizes a bridged version of the stablecoin called USDC.e to support its massive trading activity. This upcoming transition aims to improve capital efficiency and scalability as the platform reaches record daily volumes of $400 million.

Circle CEO Jeremy Allaire stated that the collaboration brings the speed of the internet to global information markets. Native USDC will be redeemable 1:1 for US dollars through regulated affiliates to improve overall platform reliability. Polymarket's decision follows a broader roadmap to deepen native stablecoin support across high-impact networks like Polygon throughout the 2026 calendar year.

Gemini Exits International Markets Amid Major Layoffs

Gemini announced on Thursday that it will withdraw from the UK, European Union, and Australian markets to refocus on America. Founders Tyler and Cameron Winklevoss confirmed that the exchange is also reducing its global workforce by roughly 25%. The company aims to adopt a leaner operating model that leverages artificial intelligence to run more efficiently with fewer staff.

The firm finds itself stretched thin in foreign jurisdictions where operational costs have recently failed to justify current demand. Gemini intends to double down on its domestic presence following recent regulatory approvals for new US-based derivatives products. Substantial restructuring charges of approximately $11 million are expected to be recorded during the first quarter of this year.

Data of the Day

The Coinbase Premium Gap fell to a yearly low of -167.8 on Thursday as institutional selling pressure intensified. This specific metric tracks the price difference between Bitcoin on Coinbase and Binance to gauge relative demand from professional traders. Analysts at CryptoQuant observed that US spot ETFs have become net sellers in 2026 by offloading over 10,600 BTC.

This negative gap indicates that whales and high-net-worth accounts are continuously selling at a lower premium than retail participants. Total spot ETF outflows reached $1.2 billion over the past week as the market entered a climate of high uncertainty. Experts warn that a lack of new capital inflows could sustain this bearish bias until demand stabilizes above key support levels.

More Breaking News

• CryptoQuant warned Bitcoin could fall to $60,000 as market weakness intensifies, noting institutional demand has officially reversed for the first time since 2022.
• Bitcoin Core developer Luke Dashjr called for Adam Back to resign from Blockstream after newly released DOJ files revealed early dealings with Jeffrey Epstein.
• ETHZilla acquired 95 modular home loans for $4.7 million, with plans to tokenize the portfolio on an Ethereum Layer 2 to generate yield.
• Representative Ro Khanna launched a formal probe into a $500 million UAE investment in World Liberty Financial, citing national security and conflict concerns.
• The CFTC withdrew a Biden-era proposal to ban sports and political prediction markets, signaling a shift toward a more rational regulatory interpretation.
• Vitalik Buterin criticized "copypasta" Layer 2 networks, arguing that rollups must offer more than just cheaper scaling as the Ethereum mainnet improves.
• Kraken Institutional launched its first managed crypto strategy with Bitwise, using covered call options to generate income from institutional Bitcoin holdings.

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