The “digital gold” narrative just ran headfirst into reality. Bitcoin plunged below $67,000 on Thursday, touching its lowest level since October 2024, as a brutal week of selling erased nearly half of the gains from Donald Trump’s election victory that had once sent crypto enthusiasts into euphoric overdrive.
The flagship cryptocurrency dropped as much as 8.6% to $66,364 before steadying around $67,500 by midday in New York. For the week, Bitcoin has cratered roughly 21%, with the broader risk-off wave hitting everything from tech stocks to leveraged crypto positions.
The Numbers Tell a Brutal Story
This isn’t a correction. It’s a reckoning. Bitcoin has now declined 47% from its October 2025 all-time high above $126,000, wiping out roughly $700 billion in market value. The cryptocurrency that was supposed to protect portfolios from exactly this kind of market chaos is instead leading the charge downward.
CryptoQuant analysts delivered a sobering assessment: “Bitcoin has broken below its 365-day moving average for the first time since March 2022 and has declined 23% in the 83 days since the breakdown, worse than the early 2022 bear phase.”
That’s not a typo. This sell-off is tracking worse than the prelude to the last crypto winter.
The ETF Exodus Accelerates
The institutional money that poured into spot Bitcoin ETFs with such fanfare a year ago? It’s heading for the exits. From November 2025 through January 2026, the spot Bitcoin ETF complex shed approximately $6.18 billion in net capital, the longest sustained outflow streak since these vehicles launched.
BlackRock’s iShares Bitcoin Trust, the crown jewel of the ETF boom, recorded $528.3 million in withdrawals on a single heavy session. The U.S. ETFs that purchased 46,000 bitcoin this time last year are now net sellers, according to CryptoQuant data.
The feedback loop is vicious. ETF redemptions force sponsors to sell spot Bitcoin into a falling market, which pushes prices lower, which triggers more risk-management selling, which forces more redemptions. It’s a textbook liquidation cascade, and it’s far from over.
Michael Saylor’s Strategy Is Underwater
Perhaps nothing illustrates the severity of this downturn quite like the situation at Strategy Inc., the company formerly known as MicroStrategy. Michael Saylor’s aggressive Bitcoin accumulation strategy, once celebrated as visionary corporate treasury management, is now staring at unrealized losses exceeding $900 million.
The company’s 713,502 Bitcoin were acquired at an average price of $76,052 per coin. With Bitcoin trading well below that level, Strategy’s entire corporate treasury is underwater for the first time since Saylor began his buying spree in 2020. The company reports fourth-quarter earnings after markets close today, a call that should be interesting to say the least.
Canaccord Genuity analyst Joseph Vafi, previously a bull on the stock, slashed his price target by more than 60%, dropping it from $474 to $185. When the bulls start capitulating, pay attention.
Gold Surges as Bitcoin Collapses
The divergence between Bitcoin and gold tells the real story here. While Bitcoin has collapsed 38% from its October peak, gold has surged to record highs above $4,800 per ounce, up more than 20% in recent weeks. Central banks continue buying gold at record levels. They’re not touching Bitcoin.
“Bitcoin has never been a consistent safe haven. It’s much more volatile than gold with multiple double-digit drawdowns,” Nansen research analyst Jake Kennis told DL News. The cryptocurrency shows “occasional safe-haven characteristics in specific scenarios but remains fundamentally a risk asset, not ‘digital gold,’ as of yet.”
NYDIG’s Greg Cipolaro put it more bluntly: “Despite being liquid for its size, bitcoin remains more volatile and reflexively sold as leverage is unwound. In risk-off environments, it is frequently used to raise cash, reduce VAR, and de-risk portfolios regardless of its long-term narrative, while gold continues to function as a true liquidity sink.”
In other words, Bitcoin isn’t an ATM for your portfolio’s rainy day. It’s the first thing investors sell when they need cash.
Broader Market Carnage
Bitcoin’s collapse isn’t happening in isolation. The Dow Jones Industrial Average shed 320 points on Thursday, while the Nasdaq declined 0.8% for its third consecutive losing session. The S&P 500 fell to its lowest level since December 2025.
Alphabet spooked investors by projecting AI capital expenditures of up to $185 billion for 2026, raising questions about whether the AI spending boom is sustainable. Qualcomm tumbled 9.5% on a weak forecast citing global memory shortages. The VIX, Wall Street’s fear gauge, spiked 22.77% to 22.87.
The Crypto Fear & Greed Index has plunged into “extreme fear” territory. Search volume for “Bitcoin price manipulation” has spiked, echoing patterns from the 2018 bear market when such searches surged 1,550% as prices fell.
What Comes Next
Technical analysts are watching $67,500 as the next potential support level, though that’s cold comfort given how easily previous support levels have crumbled. CF Benchmarks analyst Gabe Selby warned that “aggressive, high-volume bidding is needed to establish a new bullish market structure. Failure to hold above those levels keeps downside risks alive toward liquidation clusters below $70,000.”
Bearish analysts are dusting off historical drawdown data. In prior cycles, Bitcoin experienced peak-to-trough declines of 78% to 86%. If that pattern repeats, we could be looking at a move toward $35,000 or lower.
Bitwise’s Matt Hougan said it plainly: “This isn’t a correction. It’s a full-blown crypto winter.”
The question isn’t whether the “digital gold” narrative was always more marketing than reality. It’s whether investors will remember this lesson the next time crypto promoters start talking about safe havens and inflation hedges. If history is any guide, they won’t.
