Original crypto falls from October 2025 high amid whale selloffs and ETF outflows; Strategy shares collapse 75% as Michael Saylor’s bitcoin treasury company faces underwater position
Bitcoin’s morning bounce provided the only bright spot in an otherwise catastrophic week for the original cryptocurrency. The digital asset ticked up 5% to $65.9K per coin Friday morning a modest recovery that masked the brutal underlying reality: Bitcoin has lost half its value from peak to trough, plunging from approximately $125K per coin in October 2025 to a low of $61.3K yesterday. The decline represents one of cryptocurrency’s most dramatic collapses, erasing hundreds of billions in market value and triggering panic selling across the digital-asset ecosystem.
The fallout extends far beyond Bitcoin’s price chart. Strategy, Michael Saylor’s high-profile “Bitcoin treasury company” designed to offer investors cryptocurrency exposure through traditional stock markets, saw its shares crater 75% from peak levels reached last year. Yesterday alone, the stock plummeted 17% a violent move that reflects the company’s inherent exposure to Bitcoin’s implosion. At $65.9K, Bitcoin now trades well below Strategy’s $76K average acquisition cost for its massive Bitcoin hoard, meaning the company’s balance sheet has deteriorated significantly.
The math gets worse from here. Strategy’s market capitalization has fallen billions below the actual value of the Bitcoin it holds a stark reversal of fortune for a company that once traded at premiums reflecting investor enthusiasm for its bitcoin-treasury strategy. Yet the company maintained measured optimism on its Q4 earnings call Thursday, projecting it could cover all convertible debt even if it crashed 90% further and emphasizing sufficient cash reserves to maintain dividend payments for the next two and a half years.
The whale exodus explanation
The catalyst for Bitcoin’s freefall appears straightforward: the smart money is heading for the exits. Jefferies analyst Andrew Moss identified large Bitcoin holders colloquially known as “whales” in crypto circles as the primary culprits driving the selloff. According to Moss’s analysis, these whale investors accumulated Bitcoin aggressively since early January but transitioned to net sellers over the weekend, dumping positions into weakness rather than supporting the price through the downturn.
Moss’s research documented the shift with precision. Large BTC holders shifted from accumulation mode to liquidation mode, triggering cascading losses as other investors recognized the direction of whale positioning. The pattern represents a critical loss of confidence from the sophisticated operators who typically lead market movements in cryptocurrency.
The retail exodus compounds the damage
The whale selloff found reinforcement from unexpected quarters: retail investors who had gained cryptocurrency exposure through Bitcoin ETFs offered by traditional finance platforms. Spot Bitcoin ETF net outflows during the weeks of January 19 and January 26 marked the second and third largest outflows since inception, according to Moss. The pattern continued with substantial net outflows on February 4, suggesting retail capitulation is spreading as the initial Bitcoin enthusiasm evaporates.
Moss characterized the deteriorating sentiment as the “all-too-familiar ‘Crypto Winter’ chatter” a reference to previous cryptocurrency crashes that lasted months or years. His analysis offered little hope for a near-term recovery, noting that bullish indicators are sparse and that small- and medium-sized holders show no signs of buying the dip despite prices falling 50% from peak.
Historical comparisons and expert pessimism
Bitcoin’s Wednesday performance marked the worst daily decline since November 2022 the month when Sam Bankman-Fried’s FTX crypto exchange collapsed, taking billions in people’s savings with it. Deutsche Bank analyst Henry Allen drew the explicit comparison, suggesting the current decline rivals the catastrophe that destroyed FTX’s empire.
Industry observers offered uniformly grim assessments. UBS strategist Paul Donovan characterized cryptocurrency as fundamentally flawed, noting that crypto “is not an asset” but rather a speculative instrument “held by a tiny portion of society.” He expressed skepticism that recent market moves would fundamentally alter investor behavior or crypto’s structural weaknesses.
Chevy Cassar, author of the influential Milk Road crypto newsletter, acknowledged the severity bluntly. His assessment: “This sucks.” But worse awaits, according to crypto analysts monitoring historical patterns. The consensus suggests it could decline further, with bottom-finding potentially requiring anywhere from one to eleven months based on historical precedent.
Fabian Dori, chief investment officer at Sygnum Bank, described the market as approaching exhaustion with “peak fear territory” conditions. That characterization suggests further liquidation waves may be necessary before confidence returns to cryptocurrency markets.
