Big Drop

#加密市场观察 A day erasing $6.5 trillion! A global sell-off wave emerges! Why did the Wosh nomination cause a bloodbath in the crypto circle and a flash crash in precious metals?

After U.S. President Trump announced the nomination of Kevin Wosh as the next Federal Reserve Chair, coupled with the impact of the Middle East geopolitical situation, the global cryptocurrency market continued to be under pressure, with Bitcoin and Ethereum experiencing a sharp plunge over the weekend.
According to Securities Times, in the past 24 hours, the crypto world experienced a "bloodbath." Bitcoin plunged significantly, with intraday drops exceeding 7%, reaching a low of $76,000; the second-largest cryptocurrency, Ethereum, once fell over 11%, touching a low of $2,256. Data from coinglass shows that in the last 24 hours, crypto contracts on the entire network were liquidated for over $2.5 billion, with 420,000 people liquidated, of which over 90% were long positions liquidated.
Brian Jacobsen, Chief Economist at U.S. wealth management firm, believes that in the coming days, we may see more crypto sell-offs. Besides cryptocurrencies, previously soaring precious metals including gold and silver also faced heavy selling after Trump announced Wosh's nomination, leading to a sharp price decline.
Giuseppe Cicomascoro, an Italian economic investigative journalist focusing on financial and crypto news, wrote on the 30th that the global financial markets are experiencing a synchronized and intense "sell-off wave." Statistics show that global stock markets, precious metals, and cryptocurrencies have all fallen, with "the total market value of global stocks, precious metals, and digital assets evaporating by more than $6.5 trillion in one day." On February 2, gold and silver opened lower collectively. As of 7:30, spot gold fell 3.61%, to $4,718 per ounce; spot silver's decline widened again, touching a low of $79 per ounce, with an intraday drop of nearly 8%.
Last Friday, precious metals experienced a historic poetic-level crash.

"Just survive" – Cryptocurrency faces uncertainty
Reportedly, Bitcoin, the world's largest cryptocurrency, once fell to $76,000, down about 40% from its peak in 2025. It is worth noting that unlike the decline last October, this Bitcoin crash was not caused by obvious triggers or systemic shocks but was due to weakening demand, thin liquidity, and decoupling from broader markets. Previously, Bitcoin failed to respond substantively to geopolitical tensions, a weakening dollar, or rising safe-haven assets. Even after recent sharp fluctuations in gold and silver prices, Bitcoin failed to attract capital inflows. In other words, this sell-off was not driven by panic but by a lack of buyers, momentum, and confidence.
Analyses summarize that Bitcoin is suffering heavy damage in three aspects: price, (market) correlation, and confidence. Meanwhile, after Wosh was nominated as the next Fed Chair, the market also worries that he might tighten liquidity in the financial system, putting pressure on the crypto market.
It is reported that Fed decisions are crucial for the crypto market because cryptocurrencies often exhibit the so-called "risk appetite" characteristics. When interest rates are high, safer assets like U.S. Treasuries become more attractive, diverting funds from more volatile assets like cryptocurrencies. Conversely, lower interest rates increase liquidity in the financial system and encourage investors to shift to higher-risk investments. Additionally, a strengthening dollar (usually related to the Fed tightening monetary policy) has historically put pressure on Bitcoin prices.
Shadi El Damati, CEO and co-founder of Holonym, pointed out that the outside world generally believes Wosh is more hawkish than current Fed Chair Powell, who has previously criticized quantitative easing and the Fed's balance sheet expansion. "This raises concerns that if inflation rises again, he might take more aggressive measures on interest rates," Damati said. The biggest current issue for cryptocurrencies is "uncertainty." Richard Hodges, founder of Ferro BTC volatility fund, also believes that the Bitcoin market is facing capital competition. Hodges said he has warned some large Bitcoin holders to be patient, "I told them clearly, don't expect to see Bitcoin hit a new high in the next 1,000 days." He explained that the recovery of AI-related stocks and precious metals markets has attracted much attention, "Bitcoin seems to be old news from three years ago."
For ordinary investors, the current market is a "mess." 32-year-old Chicago car salesman Jenaro Salim said that everyone's mentality now is "just survive." Salim said he has invested a total of $200,000, with 40% allocated to cryptocurrencies, "I am 100% long-term bullish on Bitcoin. But when everyone gives up, persistence becomes even harder."

Are the "flash crashes" in precious metals a necessary price correction?
Reportedly, when Trump nominated Wosh as Fed Chair, the dollar was boosted, triggering a comprehensive sell-off of precious metals on January 30. The rising gold and silver prices also experienced a huge plunge on the 30th, with gold futures recording the largest single-day dollar decline ever. Silver prices plummeted 31%, the largest decline since March 1980. It is said that a wave of unstoppable rising prices recently pushed gold and silver to historic highs, attracting investors worried about high inflation and causing concerns that global investors are losing confidence in traditional currencies like the dollar. But from Thursday night, this rally finally fizzled out.
After Trump confirmed Wosh's nomination, the dollar experienced its strongest single-day performance in months. Subsequently, the rapid decline in precious metals markets from central banks, underground vaults, to Wall Street trading desks caught investors off guard.
Some analysts believe that although Wosh aligns with Trump in supporting rate cuts, he has historically been more concerned about high inflation than slowing growth, which eased Wall Street's fears that the Fed might succumb to Trump's demands to lower interest rates. Analysts see the price correction on January 30 as a much-needed reset after a dizzying rally. They explain that the previous surge increased costs for industrial users like solar panel manufacturers and auto parts makers. Some analysts also believe that quick-money traders took profits at the end of the month or hedged against sudden price drops, which may have fueled the sell-off.

HSBC(Chief Multi-Asset Strategist Max Kettner frankly said: "Metals — honestly, I don't understand." Kettner looked at the recent surge in gold prices and asked: "Gold liquidity is insufficient, yet prices keep rising. Why?"