On February 2nd, news reports that Bitcoin recently dropped to approximately $75,000, a 14% decline year-to-date, hitting a low not seen since April of last year. This round of correction once again exposes a harsh reality: even by 2026, the entire cryptocurrency market remains highly dependent on Bitcoin’s movements, and the so-called “diversified investment” strategy almost fails under extreme market conditions.
Although thousands of tokens are now available in the market, they still tend to rise and fall together with Bitcoin during downturns. Multiple indices show that since the beginning of the year, most crypto asset-related indices have declined by 15% to 19%, with sectors related to DeFi, smart contracts, and computational networks experiencing even larger drops of 20% to 25%. Even blockchain protocols with real revenue sources have not escaped the strong correlation with BTC token prices.
Data indicates that over the past 30 days, some decentralized protocols and Layer 1 networks still generated considerable revenue, but their tokens generally underperformed. AAVE has fallen over 20% this year, with only a few projects like HYPE maintaining relative resilience driven by specific applications. Jeff Dorman, Chief Investment Officer at Arca, pointed out that the market still regards BTC, ETH, and SOL as “mainstream safe-haven assets,” while protocols capable of generating cash flow are being overlooked.
Markus Thielen, founder of 10x Research, believes that the widespread adoption of stablecoins has intensified this phenomenon. As “cash equivalents,” they enable investors to quickly withdraw in times of risk, thereby amplifying Bitcoin’s dominant effect. Meanwhile, Bitcoin’s long-term market share exceeding 50% of the total crypto market cap also makes true asset diversification more difficult.
Looking ahead, as institutional funds continue to concentrate in Bitcoin, its core position within the crypto ecosystem may persist for the long term. Jimmy Yang, co-founder of Orbit Markets, stated that capital will continue to flow toward BTC, and industry consolidation will accelerate. Topics such as “Bitcoin dominance,” “correlation in the crypto market,” and “impact of BTC decline” are fueling ongoing reassessment of risk structures among investors.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Federal Reserve Hawk Signals Hit Bitcoin, Multiple OGs Sell Over $100 Million BTC
The Federal Reserve held interest rates steady and hinted at a slower pace of rate cuts, triggering a major sell-off by early Bitcoin holders and causing Bitcoin's price to decline nearly 1% to $70,600. Market adjustments to rate cut expectations have impacted the overall cryptocurrency market trajectory, with investors needing to monitor the Federal Reserve's policy impact on crypto assets.
GateNews5m ago
CryptoQuant: Bitcoin and Gold Correlation Falls to Nearly 4-Year Low, Showing Clear Divergence in Trends
The correlation between Bitcoin and gold has fallen to its lowest level since November 2022, showing a clear divergence in their trajectories. Despite Bitcoin's recent rebound to $70,000, bearish pressure is intensifying, and investors need to monitor key support levels and gold price movements to gauge market direction.
GateNews6m ago
A certain CEX's 24-hour trading volume reached $1.596 billion, with XRP, BTC, and ETH ranking in the top three
According to CoinGecko data, on March 19, a certain CEX had a trading volume of $1.596 billion, up 19.31% from the previous day. The top five tokens by trading volume were XRP, BTC, ETH, BARD, and USDT.
GateNews8m ago
If Bitcoin Falls Below $68,000, Major CEX Long Liquidations Will Reach $608 Million
According to Coinglass data, if Bitcoin breaks below $68,000, the liquidation intensity of long positions on mainstream CEXs will reach $608 million; if it breaks above $72,000, the liquidation intensity of short positions will reach $856 million. This reflects the importance of liquidation clusters and the intensity of market reaction.
GateNews17m ago
Over the past 24 hours, liquidations across the network totaled $369 million, with long position liquidations accounting for over 84% of the total.
Gate News Report: As of March 19, according to CoinAnk data, the entire network experienced $369 million in liquidations over the past 24 hours. Among these, long position liquidations accounted for approximately $310 million, while short position liquidations accounted for approximately $58.5 million. From the distribution by cryptocurrency, Bitcoin liquidations reached approximately $126 million, and Ethereum liquidations reached approximately $102 million.
GateNews18m ago
