The crypto world is going through a downturn as $1.35 trillion has been wiped off the total crypto market cap since its October peak in 2025. All major cryptocurrencies, including Bitcoin and Ethereum, have declined more than 30% in the last six months. Crypto prices falling below the stop-loss of most investors has led to heavy liquidation, amplifying the trend.
Bitcoin is the most popular cryptocurrency that dominates the entire crypto market cap by 50-55%. So when BTC dives, every other token follows the same course. BTC is currently at $78,675, marking a 31.65% decline over the last 6 months and 10.08% decline year to date. Apart from stop-loss triggered automatic liquidation, geopolitical instability, and uncertainty in crypto legislation are major driving forces behind the crash.
How Bad is the Crash?
Bitcoin had a market cap of $2.48 Trillion during the October peak in 2025. This has been reduced to 1.57 trillion in February 2026, indicating that $910 billion has been wiped off in less than five months. Moreover, BTC was sold at $123,510 in October, which has crashed to the current $78.77K, marking a 37% plunge in the price from October to February.
The TOTAL (Crypto Total Market Cap) index crashed 29.31% in the last 6 months, and 10.61% YTD. Other major crypto indexes like BTC.D and TOTAL2 also show similar trends that reflect how bad the crash is.
The table below shows how the crash hit the top cryptocurrencies:
| Rank | Name (Symbol) | Price (USD) | Market Cap (USD) | 90d % | YTD % |
|---|---|---|---|---|---|
| 1 | Bitcoin (BTC) | 78,661.37 | 1.57T | -26.15% | -10.11% |
| 2 | Ethereum (ETH) | 2,336.15 | 281.96B | -35.78% | -21.26% |
| 3 | BNB (BNB) | 777.15 | 105.97B | -20.38% | -9.97% |
| 4 | XRP (XRP) | 1.61 | 98.34B | -29.75% | -12.18% |
| 5 | Solana (SOL) | 104.36 | 59.11B | -36.34% | -16.16% |
* Data from February 3, 2026
Behind the Crypto Crash
Apart from leverage liquidations and chain reactions from the current downtrend, the causes behind the crash are spread across a multitude of factors that trigger fear-greed cycles in the market.
Legal Deadlocks
The CLARITY Act (Digital Asset Clarity Act of 2025), which brings about more legal clarity and legitimacy for cryptocurrencies, has been stuck in the Senate. Although the House passed the bill in 2025, it’s still under the Senate Banking Committee, as the traditional banking sector dissents from allowing crypto exchanges to give rewards for holding stablecoins.
Geopolitical Instability
The crisis in the Middle East has been re-ignited as the U.S. president threatened military action against Iran over non-compliance with the nuclear terms. A blast in an Iranian city amid these conflicts and media discussions on Israel’s involvement (despite its denial) might flare up the crisis further. This has made investors risk-averse and resulted in outflow from risky bets.
Trump and Tariff Games
U.S. President Donald Trump threatened eight European countries with a 25% tariff on all their goods in January. Although he went back on the threat, it made the market more uncertain about U.S. trade policy since he had made similar moves in 2025.
Macroeconomic Hawkishness and PPI Surprise
Trump has nominated Kevin Warsh as the new Fed chair since former chair Jerome Powell’s term ends this May. Although Trump had skirmishes with Powell over not slashing the rates fast enough, the new chair won’t find himself in a position to cut rates as the Producer Price Index(PPI) signals hotter inflation. So investors fear that the Fed may hit the brakes and raise rates.
Will Crypto Recover?
History shows that crypto bounces back after every crash. Bitcoin has shown resilience in 2018 and 2022 crashes, where it rebounded several times. Moreover, the Trump administration is likely to push through the CLARITY Act as the president aims for U.S. domination in digital assets. Once geopolitical tension calms down and legislative clarity regarding crypto is achieved, crypto is likely to climb back. Investors are closely following the Bitcoin price as other tokens are likely to follow its course once it climbs up.
