$4B Liquidated From Crypto Market Amidst Wider Macroeconomic Meltdown

Volatility reigns supreme across global markets, sowing unprecedented chaos across even the world’s most resilient asset classes. 

Between the partial U.S. government shutdown, the announcement of a new FED Chair, and a growing international military presence around Iran, macroeconomic markets are in an elevated state of tumult.

With over $10T erased from precious metals, corporate insiders reportedly selling off stocks, and crypto suffering $4B in liquidations, traders have been left wondering where possible relief might come from.

$10T Wiped Out in Metals Meltdown

After a parabolic run that saw both gold and silver record new all-time highs, precious metals have suffered a devastating pullback. With gold tumbling over 20% from its peak at $5,600/oz, and silver plummeting 39%, estimates suggest that over $10T has been erased from the precious metals market in a matter of days.

The metals meltdown sent shockwaves rippling throughout the wider commodities market. While globally viewed as a ‘safe haven’, the gold flush wrought havoc on Natural Gas and Crude Oil, which dropped 15% and 4%, respectively.

Friday’s market crash is largely attributed to Donald Trump’s proposed appointment of Kevin Warsh as the new Chairman of the Federal Reserve, replacing Jerome Powell. Given Warsh’s previous statements on the FED’s tendency to use QE to patch holes in the economy in the wake of the 2008 Global Financial Crisis.

"My overriding concern about continued QE, then and now, involves the misallocations of capital in the economy and the misallocation of responsibility in our government. Misallocations seldom operate under their own name. They choose other names to hide behind. They tend to linger for years in plain sight. Until they emerge with force at the most inauspicious of times and do unexpected harm to the economy." - Kevin Warsh, Lessons Learned From 10 Years of Quantitative Easing

In anticipation of hawkish measures on the part of the FED, market participants have flipped bearish on assets. The resulting sell-off triggered a liquidation cascade, exposing overleveraged traders who were late to jump on the precious metals trade.

While gold’s historic crash has inflicted unprecedented volatility across global markets, the damage may be less severe than it first appears. Despite a seismic 20% crash, gold now trades at $4,771/oz, a level that was considered a new all-time high just 11 days ago. 

$4B Liquidated from Crypto Markets

Unsurprisingly, crypto was not spared from the weekend’s violent price action. With physical gold losing 20% in a matter of days, digital gold suffered a collapse of its own. $BTC slumped to as low as $74,550 on some exchanges, its lowest price since April 2025’s “Liberation Day” tariff announcements. 

$BTC price has now dipped below the average cost basis of Michael Saylor’s Strategy, which holds 3.3% of the total Bitcoin supply. On February 2nd, Strategy announced its purchase of an additional 855 BTC at an average price of $87,974.

Solana didn’t fare any better. Amidst a flailing crypto market, $SOL has dropped 16% in the past seven days, briefly dipping below $100 as cascading liquidations wiped out over $4B in leveraged positions. 

 

$SOL wasn’t the only major altcoin hit hard in the recent washout. Enduring a 20% decline on a weekly timeframe, $ETH now trades at $2318, pushing DATs like Tom Lee’s Bitmine ($BMNR) even further underwater. At press time, Bitmine sits on ~$6.6B on unrealized losses.

Crypto markets are undeniably in dire straits. However, some indicators are flashing optimistic signals for the months ahead. According to Galaxy Research, $BTC now trades below the average cost basis of U.S. Spot ETFs for the first time since September 2024.

While this sounds bearish at first glance, price action in the months following September 2024 suggests otherwise. $BTC rose over 70% in Q4 2024, breaking new all-time highs and soaring past $100k for the first time in history.

Corporate Insiders Sell Stocks at Highest Ratio Since 2021

As if the commodity calamity and crypto carnage weren’t enough, equities might also be staring down the barrel of further downside. According to the Washington Service, corporate insiders are aggressively selling public equity, with ~1000 executives at U.S.-listed companies selling stocks in January. 

Comparatively, the Washington Service indicates that only 207 executives have bought, or are buying stocks, in the same timeframe, skewing the sellers-to-buyers ratio to its highest point since February 2021. 

However, while this may sound like a cause for alarm, historical trading data suggests this may not harm the stock market. Despite the high concentration of corporate insider selling, the S&P500 recorded impressive returns throughout the remainder of 2021, rising 25% by year's end.

The Week Ahead:

With macroeconomics looking fragile and geopolitical tensions tight, markets may be in for yet another volatile week. 

Critical events that may influence markets include a release of quarterly borrowing estimates by the U.S. Treasury on Tuesday, and earnings reports from Google, Amazon, and Strategy, later in the week.

On Saturday, China is expected to publish updates on its Gold Reserves, which may impact commodity markets.

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