# Crypto Market Sees Over $2 Trillion Wiped Out Amid Selloff **Published:** 2026-06-12T12:11:42.398Z **Topic:** Crypto Crash **Sentiment:** neutral **Publisher:** TrendWatcher — https://www.trendwatcher.in/article/f3336211-3ea6-4d00-9bfa-fd5a66e2f7d9 The cryptocurrency market has experienced a significant downturn, with over $2 trillion in value erased. Bitcoin and other major tokens have fallen, driven by The cryptocurrency market has seen more than $2 trillion in value wiped out from its peak, unsettling investors and raising questions about the stability of the alternative asset space [1, 2]. This downturn has impacted major cryptocurrencies like Bitcoin and Ethereum, as well as less mainstream tokens [1, 2]. **Key takeaways** * The total crypto market capitalization has fallen from a peak of around $4.2 trillion to approximately $2.1-2.2 trillion [1, 2]. * Bitcoin, the flagship cryptocurrency, has dropped over 50 percent from its all-time high of around $126,000, now hovering near $60,000 [1, 2]. * Factors contributing to the selloff include institutional sales, a shift towards traditional assets like AI stocks, and macroeconomic uncertainties [1, 3]. * The market experienced a significant deleveraging event in February 2026, with over $12 billion in liquidations over a two-week period [3]. ## Market Plunge and Contributing Factors The current crypto market downturn is characterized by a widespread selloff that has seen the total market value decrease from a peak of approximately $4.2 trillion in October to roughly $2.1-2.2 trillion [1, 2]. Bitcoin, which reached an all-time high of around $126,000 in October, has since fallen by over 50 percent, hovering around the $60,000 mark [1, 2]. This marks Bitcoin's weakest stretch since late 2024 [2]. Other major tokens, including Ethereum, BNB, Solana, XRP, Dogecoin, Cardano, and Bitcoin Cash, also experienced declines of 9-13 percent as of February 6 [2]. Several factors have been cited as fueling this crash. Institutional selloffs, such as Strategy Inc. selling $2.5 million worth of Bitcoin despite its founder Michael Saylor being a notable advocate, have contributed to short-term pressures [1]. The enduring appeal of traditional assets, particularly U.S. stock indexes like the Nasdaq, S&P 500, and Dow Jones, which have recorded fresh record highs driven by an AI-fueled rally, has also diverted investor attention away from crypto [1]. Charles-Henry Monchau, chief investment officer at Syz Group, noted that speculators are moving into AI stocks, and upcoming IPOs are anticipated to draw retail money [1]. Macroeconomic headwinds, including softer U.S. labor data and concerns about heavy capital spending in the AI sector, have also weighed on broader risk sentiment [2]. ## A Systemic Deleveraging Event The market experienced a severe structural stress test in February 2026, described as a systemic deleveraging event [3]. Bitcoin plummeted from around $84,000 to a session low of $63,295, a 24% drawdown that triggered one of the largest liquidation cascades in crypto's recorded history [3]. Over a one-week period ending February 5, liquidation volume exceeded $7.0 billion, with cumulative liquidations surpassing $12.0 billion over two weeks [3]. The largest single-day liquidation event on record occurred on February 4, totaling $2.56 billion [3]. This cascade was exacerbated by Bitcoin breaking critical psychological support levels, triggering stop-losses and margin calls in a self-reinforcing feedback loop [3]. This deleveraging event was not solely driven by crypto-native issues but originated in traditional macro markets [3]. Contagion began with a violent repricing in precious metals and technology equities, with silver experiencing its worst single-day decline since 1980 [3]. The S&P 500 and Nasdaq also saw significant drops [3]. Political uncertainty surrounding U.S. monetary policy, specifically President Trump's nomination of Kevin Warsh to lead the Federal Reserve, signaled potential balance sheet reduction and tighter liquidity, which can negatively impact speculative assets [3]. ## Why it matters The current downturn has led some to question crypto's appeal as a hedge against uncertainty and inflation, raising doubts about the future of the alternative asset space [1]. Despite the struggles, major institutions like JPMorgan Chase still view crypto as a significant force and a potential rival to the traditional financial system, with CEO Jamie Dimon noting the emergence of new competitors based on blockchain technology [1]. The Trump administration has also signaled continued support for crypto, with President Trump having established a working group to make the U.S. the "crypto capital of the world" and setting up a national Strategic Bitcoin Reserve [1]. An upcoming "breakthrough" announcement regarding this reserve could offer some upward pressure for prices, according to Patrick Witt of Trump’s Council of Advisors for Digital Assets [1]. Traders on Kalshi expect Bitcoin to end the year around $68,000, an increase from current levels but still below its all-time highs [1]. ## Sources 1. Newsweek — [Crypto Crash Deepens: $2 Trillion Wiped From Market](https://www.newsweek.com/crypto-crash-deepens-2-trillion-wiped-from-market-12038228) 2. Businesstoday — [Crypto crash wipes out over $2 trillion mcap; Bitcoin prices ...](https://www.businesstoday.in/crypto/token/story/crypto-crash-wipes-out-over-2-trillion-mcap-bitcoin-prices-nearly-halves-in-4-months-514908-2026-02-06) 3. Coinchange — [The $2 Trillion Crypto Crash: How February's Liquidation ...](https://www.coinchange.io/blog/the-2-trillion-crypto-crash-how-februarys-liquidation-revealed-the-markets-leverage-addiction) --- Cite as: TrendWatcher, "Crypto Market Sees Over $2 Trillion Wiped Out Amid Selloff", https://www.trendwatcher.in/article/f3336211-3ea6-4d00-9bfa-fd5a66e2f7d9