#美联储人事与宏观政策影响 Over 410,000 traders forced to liquidate! Cryptocurrency weekend "bloodbath" strikes hard! What are the funds afraid of?

Over the weekend, cryptocurrencies fell below $76,000, with more than 410,000 traders liquidated.
Market concerns about Wosh maintaining high interest rates, shrinking the balance sheet, and reducing liquidity after taking office have further fueled market panic.
Following epic crashes in gold and silver, cryptocurrencies like Bitcoin and Ethereum also experienced a "big plunge" over the weekend. Bitcoin dropped below $76,000, retreating about 40% from its 2025 high, and its monthly decline set the longest streak since 2018. Data shows that the sell-off caused the total market capitalization of cryptocurrencies to evaporate approximately $111 billion. Globally, over 410,000 traders were liquidated.

Is it related to the Federal Reserve?
Cryptocurrencies often exhibit "risk appetite" investment characteristics. When interest rates are high, safer yields like U.S. Treasuries become more attractive, naturally leading funds to flow out of high-volatility assets like cryptocurrencies. Conversely, lower interest rates increase liquidity in the financial system, encouraging investors to seek higher-risk assets.
Therefore, the Fed's decisions are crucial to the cryptocurrency market.
Historically, Fed tightening policies have often been accompanied by a strengthening dollar, which puts pressure on Bitcoin prices. The recent decline in cryptocurrencies occurred amid thin liquidity and limited buying interest. The nomination of Wosh has further intensified market concerns.
Wosh is seen as more "hawkish" than Powell, especially given his past criticism of quantitative easing and the Fed's balance sheet expansion, causing investors to worry he might tighten liquidity. More unsettling is that Wosh has publicly questioned the legitimacy of cryptocurrencies, calling many private crypto projects "fraudulent" and "worthless," and stating, "Cryptocurrency is an inappropriate name because it is software, not currency." No one knows whether he will implement these views, adding to uncertainty.

Is the market disappointed?
Since the sharp sell-off in October last year, the overall crypto market has been very sluggish. Previously, the dollar weakened and gold prices soared to record highs, but these positive factors failed to boost crypto market sentiment. Amid geopolitical tensions and increased safe-haven demand, cryptocurrencies and global stock markets declined in tandem, further fueling market panic.
Looking back, cryptocurrencies lack a stable value foundation.
Since surging over 13,000% in 2017 and entering the mainstream view, Bitcoin has gone through cycles of rapid rise and fall. For example, between 2020 and 2021, its price soared from less than $10,000 to nearly $70,000, then sharply declined again.
Such large price fluctuations not only pose huge risks for investors but also make cryptocurrencies difficult to serve as reliable stores of value and mediums of exchange.
Additionally, the crypto market is heavily speculative, with large inflows of funds for trading and speculation, which can easily trigger market bubbles and threaten financial stability.

Are crypto institutions shifting to gold?
Institutional funds were once a core support for Bitcoin's price, but recently, Bitcoin's price has approached the cost basis of major institutional holders like MicroStrategy. ETF funds are showing signs of wavering, and under the dual pressures of profit-taking and regulatory uncertainty, institutions are forced to reduce their holdings. Some crypto companies have announced plans to allocate 10% to 15% of their investment portfolios into physical gold.

Can Bitcoin continue its upward trend after persistent declines?
After reaching its peak in 2021, Bitcoin took 28 months to recover. After the ICO boom in 2017, it took nearly three years. In comparison, the current downturn may still be in its early stages. Some investors see fundamental challenges: competition for funds.
Richard Hodges, founder of Ferro BTC Volatility Fund, said, "The revival of stocks related to AI and precious metals has attracted macro traders and momentum traders." Bitcoin's volatility currently lags behind gold and silver, further weakening its appeal as a risk hedge and speculative asset. However, there are also optimistic voices. Zhao Wei, senior researcher at OK Research Institute, stated that the fundamental basis of the Bitcoin market still exists. The trend of global asset diversification, increasing long-term capital, and growing institutional participation all lay the groundwork for Bitcoin's potential future rise.