Let's call it 'Black Sunday' — Bitcoin plummeted sharply within just a few hours, breaking through several key support levels, and the total liquidation amount across the network reached the highest record since the epic crash in October 2025.
First Pressure: Trump's 'Ace in the Hole' and the Return of a Strong Dollar
When Trump officially nominated Kevin Warsh for the next chairman of the Federal Reserve, the air on Wall Street became tense. Who is Warsh? A staunch hawk, an advocate for tightening the monetary reins.
Global capital is responding rapidly, starting to flee all non-US assets and rushing toward the US dollar, the 'safe haven'. The logic is simple: a stronger and tighter Federal Reserve means that the overall valve of global liquidity will be tightened. Under this expectation, traditional safe-haven assets like gold have fallen sharply, while areas like cryptocurrencies, viewed as 'risk assets among risk assets', have bled out instantly.
The second pressure: The SEC's tightening grip and the end of the native narrative
Entering 2025, the actions of the U.S. Securities and Exchange Commission (SEC) have become increasingly clear and firm. Especially regarding the regulation of 'tokenized stocks', the SEC issued explicit custody guidelines in December 2025, requiring absolute control over the private keys of 'crypto asset securities' and fully incorporating them into the traditional securities regulatory framework.
What does this mean? It means that the crypto world’s attempt to reshape the grand narrative of traditional finance through 'tokenization' has been forcibly put on pause by the authorities.
The third pressure: Bitcoin's 'identity crisis'
In the just-passed year of 2025, the market gave Bitcoin two excellent opportunities to prove itself. The first was during geopolitical tensions when gold prices soared, demonstrating its millennia-old status as a safe-haven asset. However, Bitcoin performed poorly, even falling alongside risk assets, and its 'digital gold' halo dimmed.
The second chance is the AI boom sweeping the global stock market. As tech giants like Nvidia continuously set new highs, the market is immersed in the frenzy of a new technological revolution, while Bitcoin, as the 'cutting edge of digital technology', is once again marginalized. Funds are pouring into the AI sector, with some analyses suggesting that the competition for AI computing power is siphoning off funds that might have flowed into Bitcoin.
Having neither become 'gold' nor kept up with 'AI', Bitcoin awkwardly finds itself stuck in the middle. It lacks the trust base of traditional safe-haven assets and does not have the growth story of emerging tech assets. This narrative failure has caused Bitcoin to significantly underperform against gold and certain US stock indices in 2025.
This 'digital gold' that has lost its identity has finally failed to stand firm. Liquidity was instantly drained, leading to a violent deleveraging stampede.
