BTC crashes below $67K, $1.3B liquidated | Crypto Briefing Feb 5

Crypto markets entered "extreme fear" territory as Bitcoin crashed below $67,000 and liquidations topped $1.3 billion in the past 24 hours. Despite the carnage, JPMorgan analysts see long-term potential for Bitcoin to reach $266,000.

Top Stories

Bitcoin Crashes to 15-Month Low

Bitcoin tumbled below $67,000 for the first time since November 2024, with Stifel analysts warning of a potential drop to $38,000. The selloff triggered over $1.3 billion in liquidations as leveraged positions were wiped out across exchanges.

JPMorgan Sees $266,000 Bitcoin Long-Term

JPMorgan analysts project Bitcoin could reach $266,000 "over the long term" as it becomes more attractive than gold. However, they called this target "unrealistic" for 2026, citing current negative market sentiment.

Treasury Secretary Blasts Crypto "Nihilists"

Treasury Secretary Scott Bessent told Congress that crypto "nihilists" who resist the Clarity Act "should move to El Salvador." His comments came during Senate testimony where he appeared to empathize with banking lobby concerns about crypto regulation.

Ethereum Plunges Below $2,000

Ethereum dropped below $2,000 as holder confidence faced a major stress test. BitMine, the Ethereum treasury company, now faces $8 billion in unrealized losses as its holdings crater.

Markets

Major Crypto Selloff Intensifies

• Bitcoin fell 7% to trade near $67,000, hitting 15-month lows
• Ethereum crashed below $2,000, down significantly from recent highs
• XRP led major crypto losses with a 15% daily decline
• Crypto fear and greed index hit "extreme fear" levels
• Over $1.3 billion in leveraged positions liquidated across exchanges

Institutional Outflows Continue

• US Bitcoin ETFs recorded $545 million in outflows for the second consecutive day
• Crypto funds have now bled for three straight months, a historical first
• Coinbase shares fell 6.14% while BitMine dropped 9.17%

Regulation

Crypto Policy Tensions Rise

• Treasury Secretary Bessent criticized crypto advocates resisting market structure legislation
• Crypto firms are pushing new compromises to save key market structure bills
• Brazil moves to ban algorithmic stablecoins like Ethena's USDe
• CFTC formally withdrew Biden-era proposal to ban sports and political prediction markets

Corporate

Exchange Consolidation Continues

• Gemini exits UK, EU and Australia, cutting 25% of staff to focus on US markets
• Customers must transfer to eToro by end of March for withdrawals
• Exchange cites push for leaner, more automated operations using AI

Strategic Investments

• Tether invested $100 million in Anchorage Digital at $4.2 billion valuation
• Partnership deepens ties around stablecoin infrastructure and compliance
• Circle partnered with Polymarket to integrate native USDC settlement

Technology

AI and Blockchain Developments

• Elite scientists admit AI now does 90% of their thinking at closed-door Princeton meeting
• BNB Chain announced support for ERC-8004 to enable verifiable identity for AI agents
• SpaceX plans Starlink phone and direct-to-device internet as IPO approaches

Ethereum Ecosystem Updates

• Vitalik Buterin criticized "copy-paste" EVM chains, calling them a "dead end"
• Aave delegate platform proposed pausing three L2 deployments citing weak revenue

DeFi

Protocol Shutdowns and Struggles

• Aptos-based Merkle Trade shuttered operations amid broader Aptos TVL decline
• Move comes less than two years after $2 million seed round
• Ethereum faces billion-dollar sell pressure from leveraged positions unwinding

Quick Hits

• Michael Burry flags Bitcoin pattern suggesting drop to low $50,000s
• UK teens jailed for $4.3M crypto robbery caught on police video
• Russian bank Sovcombank offers Bitcoin-backed loans to public