Bitcoin Tumbles Out of Global Top 10 Assets as Dollar Surge Hits Crypto

$1.62 trillion. That's what remains of Bitcoin's market capitalization after a brutal week that saw the world's largest cryptocurrency tumble out of the global top 10 assets for the first time in years. Just months ago, it was knocking on the door of a $2.5 trillion valuation.

The Digital Gold Loses Its Shine

Bitcoin now sits at 12th place in global asset rankings, trailing behind Tesla and Saudi Aramco. The cryptocurrency shed over 9.3% in just seven days, with prices crashing from around $90,000 to $78,500.

The fall from grace is particularly striking when you consider Bitcoin's recent highs. In October, when it hit an all-time peak of $126,000, Bitcoin ranked 7th globally, sitting comfortably ahead of tech giants like Google and Amazon. At one point last year, it even cracked the top five, a position that seemed to validate the "digital gold" narrative.

Now? Bitcoin's market cap puts it in the same league as Caterpillar and Coca-Cola.

Ethereum fared even worse, plummeting to 56th place with a market cap just above $300 billion after losing 14.5% of its value. The second-largest cryptocurrency, once flirting with the top 25 assets, now trades below traditional companies like Cisco and Inditex.

The Warsh Effect Ripples Through Markets

The catalyst for this dramatic selloff wasn't some crypto-specific scandal or regulatory crackdown. Instead, it was a single name: Kevin Warsh. Trump's nomination of the 2008 financial crisis veteran as Federal Reserve chair sent shockwaves through risk assets.

Warsh's reputation as a hawk—favoring higher real interest rates and a smaller Fed balance sheet—triggered the dollar's biggest rally since May. When the dollar flexes its muscles, everything else tends to buckle, and crypto was no exception.

The dollar surge didn't just hammer digital assets. Precious metals, often considered crypto's traditional cousins in the alternative investment space, took an even bigger beating. Gold plunged 9% in a single session to just under $4,900, while silver crashed a staggering 26.3% to $85.3.

Interestingly, despite the carnage, gold maintains its crown as the world's largest asset by market cap at $34.1 trillion. Among companies, NVIDIA still leads at $4.6 trillion, followed by Alphabet at $4.08 trillion.

When Correlation Becomes a Problem

This selloff exposes a uncomfortable truth about Bitcoin's evolution. The cryptocurrency that was supposed to be uncorrelated with traditional markets is increasingly moving in lockstep with risk assets. When the dollar strengthens and bond yields rise, Bitcoin falls—just like tech stocks.

For crypto advocates, this presents a philosophical crisis. Bitcoin's original promise was to serve as a hedge against traditional financial systems and fiat currency debasement. Yet here it is, getting crushed by the very dollar it was meant to replace.

The institutional adoption that many celebrated—Bitcoin ETFs, corporate treasuries, pension fund allocations—may have inadvertently tied crypto's fate to traditional market cycles. When institutions need liquidity, they sell everything, including Bitcoin.

The Road Ahead

This downturn raises fundamental questions about crypto's role in portfolios. Is Bitcoin still "digital gold," or has it become just another risk asset? The answer matters enormously for the millions of investors who bought into the diversification narrative.

The timing couldn't be more awkward for the crypto industry. Just as regulatory clarity seemed within reach and institutional adoption was accelerating, macro forces have reminded everyone that Bitcoin remains vulnerable to the same forces that drive traditional markets.