Bitcoin Crashes Below $64K, Erasing Entire Trump Rally

$126,000. That was Bitcoin's all-time high in late 2025, when optimism around pro-crypto policies reached fever pitch. Fast-forward to Thursday, and the world's largest cryptocurrency crashed below $64,000 for the first time since 2024, obliterating every penny gained since Donald Trump's election victory.

The 13% single-day plunge marked Bitcoin's largest decline in years, as leveraged traders were forced into mass liquidations amid a broader flight from risk assets. What we're witnessing isn't just a correction—it's the complete unwinding of the "Trump crypto rally."

The Great Liquidation: $1 Billion Wiped Out

More than $1 billion in Bitcoin positions were liquidated as prices spiraled downward, according to Reuters. The crypto market has shed roughly $2 trillion in value since its October peak, with Ethereum suffering even steeper percentage losses than its larger sibling.

While Bitcoin managed a modest rebound Friday morning to around $67,000, it's still trading at roughly half its all-time peak. The retreat has evolved from what many initially dismissed as a short-term correction into what Motley Fool analysts are calling a full-blown "crypto winter"—a particularly brutal bear market where confidence in the entire asset class evaporates.

Tech Stocks Drag Crypto Down

Bitcoin's collapse didn't happen in isolation. The S&P 500 and Nasdaq both extended their slides this week, driven by mounting concerns about tech valuations and slowing earnings growth—especially in AI-related sectors. This correlation exposes a uncomfortable truth: despite years of "digital gold" rhetoric, Bitcoin still trades more like a risk asset than a safe haven.

U.S. spot Bitcoin ETFs are experiencing significant outflows as investors rebalance toward traditional assets. These outflows reduce the market's liquidity cushion, leaving crypto more vulnerable to sharp moves. The absence of aggressive institutional "dip buying"—once a hallmark of previous downturns—has left prices at the mercy of retail sentiment and speculative flows.

Corporate Casualties Mount

Michael Burry, the "Big Short" investor, warned last week that "sickening scenarios have now come within reach." His prediction is already materializing. MicroStrategy, one of Bitcoin's largest corporate holders, reported a staggering $12.4 billion loss in Q4 2025 as falling crypto prices eroded its reserves. The company's stock has plummeted alongside Bitcoin.

Gemini announced layoffs Thursday and a strategic pullback amid depressed trading volumes and an 80% slide in its share price since listing. The crypto exchange's struggles reflect broader industry pain as the euphoria of 2025 gives way to harsh reality.

Prediction markets like Kalshi and Polymarket show rising odds that Bitcoin may test much lower levels later this year. Some analysts at IG predict prices could approach $56,000, while market watchers describe the current phase as "full capitulation mode"—where even large "whale" investors are surrendering positions rather than defending them.