Cryptocurrency crashes! 1.3 trillion "bloodbath"! U.S. Treasury Secretary suddenly makes a major announcement!

Cryptocurrency Prices Plunge!

Today, Bitcoin once dropped nearly 8%, falling close to $70,000. The world’s second-largest cryptocurrency, Ethereum, also declined over 8%, breaking below $2,100. The third-ranked cryptocurrency, XRP, plummeted over 10%, trading at $1.42. The total market capitalization of virtual currencies tumbled nearly 7%, reaching around $2.48 trillion, with a single-day loss of approximately $186 billion (equivalent to nearly 1.3 trillion RMB).

So, what exactly happened?

Previously, U.S. Treasury Secretary Janet Yellen hinted that the U.S. government would not bail out cryptocurrencies. This may have been the fuse for the virtual currency market’s sharp decline. Subsequently, well-known investor Michael Burry warned that the continued drop in Bitcoin’s price could “trigger a death spiral, leading to a large-scale collapse in value.” This triggered a wave of forced liquidations.

Collapse-Style Sell-Off

Since the beginning of this year, the virtual currency market has been worse than gold and silver. Today, Bitcoin broke below $71,000, approaching the next support level at $70,000. Ethereum plunged over 8%, breaking below the $2,100 support. Other cryptocurrencies also experienced widespread declines.

According to CoinGlass data, in the past 24 hours, a total of 176,200 traders were liquidated worldwide, with total liquidation amounting to $871 million. The largest single liquidation was in Aster - BTCUSDT, valued at $11.3666 million.

Bitcoin has declined in 7 out of the last 8 trading days, dropping more than 40% from its record high of $126,000 set in October last year. After falling below $75,000, stop-loss orders were triggered, leading to massive unwinding of leveraged positions, especially in the derivatives market, which worsened the situation.

Fundstrat Digital Asset’s head, Sean Farrell, stated that the mid-range of $70,000 is a reasonable support zone because around March 2024, it was a high point of approximately $74,000, and in April 2025, it was a low point during a tariff-driven sell-off.

Farrell wrote in a note: “All else being equal, the levels reached last weekend and the observed surrender levels will bring more attractive short-term risk/reward.” The strategist also warned that market conditions are still declining, and traditional markets pose “ample position risk that could negatively impact the crypto market.”

Burry Sparks the Market

Before Bitcoin’s current plunge, U.S. Treasury Secretary Janet Yellen hinted that the U.S. government would not rescue cryptocurrencies. During a heated debate with the House Financial Services Committee on Wednesday, Yellen was asked whether the U.S. Treasury has the authority to buy Bitcoin or other cryptocurrencies. Yellen responded, “I do not have the authority to do that, and as Chair of the Financial Stability Oversight Council (FSOC), I do not have that authority either.”

In its latest 2025 annual report, FSOC notably softened its stance on crypto assets and stablecoins, no longer reiterating its previous strong language that viewed them as systemic financial risks. FSOC stated that the “GENIUS Act,” which took effect in July this year, has established a federal regulatory framework for payment stablecoins, providing regulatory clarity and helping to promote stablecoin innovation in the U.S. while managing risks. FSOC did not repeat its warnings from the 2024 report about stablecoins “prone to runs” and the potential for market concentration to amplify systemic risks, and it downplayed concerns about illegal activities, noting that the vast majority of on-chain transactions are for legitimate purposes. FSOC believes that U.S. regulation of crypto assets is shifting from “risk warning” to “systemic integration.”

Additionally, well-known investor Michael Burry warned that the continued decline in Bitcoin’s price could “trigger a death spiral, leading to a large-scale collapse in value.” Bitcoin has been exposed as a purely speculative asset and is far from being a hedge against inflation like gold and other precious metals. Burry gained fame for predicting the 2008 financial crisis.

(Source: Securities Times)