Bitcoin’s recent volatility has erased post-election gains, triggering a broader sell-off in the cryptocurrency market and exposing significant losses for corporate holders. The cryptocurrency fell as low as $60,000 this week before recovering to around $69,000 as of Friday, effectively reversing the gains made after the November 2024 U.S. Election.
Corporate Losses Mount
The downturn has been particularly painful for companies that have invested heavily in Bitcoin as a treasury asset. Strategy, the largest corporate owner of Bitcoin, reported a $12.6 billion net loss in the fourth quarter of 2025, driven by the declining value of its holdings. This translates to a $17.4 billion operating loss attributable to paper losses on its Bitcoin portfolio. As of February 6, 2026, Strategy owns 713,502 BTC, acquired at an average cost of $76,052 per coin, leaving the company with over $9.5 billion in unrealized losses.
The impact extends beyond Strategy. A report by 10x Research, released in October 2025, estimated that retail investors have lost approximately $17 billion chasing Bitcoin exposure through public companies like Strategy and Metaplanet. The losses stem from share premiums that previously priced these companies far above the actual value of their Bitcoin holdings. Analysts at 10x Research noted that investors “overpaid for Bitcoin exposure by roughly $20 billion,” while companies converted inflated share prices into Bitcoin on their balance sheets.
Metaplanet, for example, saw its market capitalization surge to $8 billion from a base of $1 billion in Bitcoin before crashing to $3.1 billion, even while holding $3.3 billion in Bitcoin. Shareholders lost $4.9 billion in value while the company accumulated $2.3 billion worth of Bitcoin, according to the 10x Research report.
Market-Wide Deleveraging and ETF Outflows
The sell-off wasn’t isolated to Bitcoin and related companies. Market participants described a “sell at any price” dynamic, accompanied by wider cross-asset deleveraging. The Nasdaq 100 tracker QQQ fell approximately 500 basis points over three sessions, while silver and gold experienced declines of roughly 38% and 12% below their cycle highs, respectively.
Adding to the pressure, spot Bitcoin ETFs have experienced net outflows of around $1.25 billion over the past three days. Jim Bianco of Bianco Research estimates that the average ETF cost basis is near $90,000, leaving holders with approximately $15 billion in unrealized losses. Bianco observed on social media that Bitcoin is now trading more in line with software stocks, suggesting a shift in investor sentiment.
software stocks tumbled this week following the release of a new automation tool by Anthropic, impacting companies like Salesforce, Adobe, and ServiceNow. BTIG chief market technician Jonathan Krinsky noted a correlation between Bitcoin and software stocks, suggesting that both may have established tactical lows.
Structural Factors and Miner Impact
Market structure also contributed to the turbulence. Bitcoin’s average 1% market depth – a measure of tradable volume near the current price – has fallen to around $5 million from over $8 million in 2025, potentially exacerbating price swings.
The price drop has also put significant pressure on Bitcoin miners. Data from Antpool indicates that most mining machines, excluding the latest generation, are now operating at a loss or near break-even. Only the newest models, such as the Antminer S23 series, remain profitable. For instance, the Antminer S23 Hydro generates approximately $18.53 in daily revenue per unit, while older models like the Antminer S21 series earn only about $0.12 per day, and the Whatsminer M63S incurs a daily loss of approximately $0.47.
Gemini Restructuring and Bitfarms’ Pivot
The challenging environment has prompted strategic shifts within the crypto industry. Gemini announced plans to exit the U.K., European Union, and Australia, and reduce its staff by approximately 25% as part of a restructuring effort. The firm will enter withdrawal-only mode for users in affected regions and partner with eToro to facilitate asset transfers.
In a more dramatic move, Bitfarms announced it is abandoning its identity as a “Bitcoin company” to focus on artificial intelligence (AI) infrastructure and a move to the U.S. Market.
Looking Ahead
Despite the recent turmoil, some analysts remain optimistic. Krinsky suggests that Bitcoin has established a tradable low around $60,000 and that a move back above $73,000 would confirm this. However, the market remains sensitive to macroeconomic factors and the evolving regulatory landscape. The Trump administration’s continued pro-crypto stance could provide some support, but the recent volatility underscores the inherent risks associated with this asset class.
