Bitcoin Plunge Steepens, Down 48 Percent From January 2025. Why?

By Mish Shedlock of MishTalk
Friday, February 6, 2026 12:32 PM EST

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Crypto’s Worst Day Since 2022 Crash

The Wall Street Journal reports Bitcoin Booster’s $12 Billion Loss Headlines Crypto’s Worst Day Since 2022 Crash

Bitcoin tumbled to $63,596.56 at 4 p.m. Eastern time, sliding 13% during its worst 24-hour trading period since June 2022. Minutes later, Michael Saylor’s Strategy said crypto’s late-2025 swoon had left the bitcoin-stockpiling company with a staggering paper loss in the fourth quarter.

Strategy’s fourth-quarter net loss widened to $12.4 billion, or $42.93 a share, from $670.8 million, or $3.03 per share, a year earlier. In the most-recent period, the company recorded an unrealized fair-value loss of $17.4 billion on its digital assets, complying with accounting rules that require companies to value their holdings at current market prices.

Saylor, who co-founded the software company formerly known as MicroStrategy MSTR has spent the past six years transforming his business into a storehouse of bitcoin. He has issued stock and debt to raise billions of dollars for his crypto-buying spree, and by Feb. 1 held 713,502 bitcoins. Dozens of other public companies followed Saylor’s lead, emboldened by a surge in crypto prices during the early months of the second Trump administration and the performance of Strategy’s shares.

The selloff in bitcoin gained steam this past week, when crypto exchanges sold trader assets automatically because the value of their collateral has dropped too low. The token traded at $62,955 as of late Thursday afternoon. 

Bitcoin trades well below Strategy’s average purchase price of $76,052, and investors fear a further slide might eventually force the company to sell their holdings.

Saylor has long implored investors to never sell their bitcoins. But he rattled the crypto market late last year by suggesting that Strategy could in fact shed some tokens or bitcoin-backed derivatives if its mNAV, or its enterprise value divided by the value of its crypto holdings, were to drop below one. Early on Thursday, though, Saylor took to X, the social-media platform, to write: “HODL,” a reference to an inside joke that means: hold on to your bitcoin.

Strategy’s mNAV stood at about 1.1 as of Thursday evening. The company has continued to buy bitcoin in recent weeks.

When the so-called mNAV drops below one, it means the company trades at a discount to its crypto holdings and may have difficulty selling shares to buy tokens. And to buy back stock, it might have to sell tokens. 

While Strategy is at the epicenter of the crypto selloff, the company itself faces no immediate consequences for bitcoin’s decline, analysts said. 

The company has mostly relied on selling common and preferred shares to fund its bitcoin acquisitions. It has $8.2 billion in convertible, unsecured debt that matures between 2028 and 2032. Strategy has built up cash reserves of more than $2 billion to help ensure it can meet future dividend and debt-interest payments.

Patrick Horsman, chief investment officer at BNB Plus, said his firm, which stockpiles crypto exchange Binance’s BNB token, is looking to merge with similar companies to help weather the new crypto winter. 

“It’s disappointing,” Horsman said of the drawdown. “I think everyone’s kind of beaten down a little.”

“We think there’s strength in scale, and there’s a number of digital-asset treasury firms that I think we could look to roll up together and be a bigger and stronger organization,” he said.

MSTR Daily

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Don’t Worry Saylor Covered Until $8,000

The Melania Coin

I hear the movie is doing a bit better.

Bessent at a Loss for Words

Bitcoin Daily Ewave Count

If the above count or similar count is correct, this is just the beginning of the Bitcoin nightmare.

In general, impulse moves are in 5 waves and corrective moves in 3 waves. The cleanest look at 5 waves down is between the large 2 and the large 3.

Wave 3s, or sometimes wave 5s, tend to be the strongest.

If this is the top, this whole structure is just part of a bigger wave 1 down. (See lead chart). There will eventually be a bigger wave 2 correction up. That would be followed by wave 3 of 3 down.

This is just a what if, not a prediction. But it’s very plausible, technically and fundamentally.

Bitcoin Bounce Where?

The weekly support line was 75,000 and we smashed through that as expected.

The next support is a consolidation zone 50,000 to 55,000. Then it’s 40,000 followed by 25,000 and 15,000.

For those of you who do not believe in technical analysis, I offer this.

Incoherent Saylor Rants

“If people knew what I know Bitcoin would go to $10 million tomorrow.”

The next rant is even worse.

I disagree with that analysis. Bitcoin isn’t a Ponzi scheme. But it may go down in history as the biggest, longest lasting mania ever.

Financial Times – Every Option Is Bad

Bitcoin Bulls Beware! Jim Cramer Has Spoken

Jim Cramer is famously noted for being wrong on nearly ever call.

Another View

This Takes Talent

Saylor once thought Bitcoin was headed to zero. Then he got true religion and started buying at $11k. Now, he’s currently holding about 3.5 percent of all BTC.

But he’s underwater.

Legendary!

What About the Fundamentals?

Thanks. Glad you finally asked.

So here’s the issue you get influencers like this guy have a quarter million followers and they claim they don’t know why it is declining… it’s because they don’t understand basic mechanics of price discovery. They don’t understand that the marginal buyers or the float determines price they think the onchain bitcoin is that is the price discovery.

Once you can synthetically manufacture the supply, the asset is no longer scarce and once scarcity is gone, price becomes a derivatives game, not a supply-and-demand market.

This is exactly what has happened to Bitcoin. This is the same structural break that occurred in gold, silver, oil, and eventually equities once they became derivatives-dominated. The original premise that no longer exists Bitcoin’s entire valuation logic was built on finite supply (21M) and inability to be rehypothecated.

That died the moment: •Cash-settled futures •Perpetual swaps •Options •ETFs •Prime broker lending •Wrapped BTC •Total return swaps were layered on top of the chain.

From that moment forward: Bitcoin supply became theoretically infinite. Not on-chain in price discovery.

The metric that explains the collapse Synthetic Float Ratio (SFR) Once you can synthetically manufacture the supply, the asset is no longer scarce — and once scarcity is gone, price becomes a derivatives game, not a supply-and-demand market.

Why Wall Street can now “trade against” Bitcoin They do exactly what they’ve done in every commodity market: 1.Create unlimited paper BTC 2.Short into rallies 3.Force liquidations 4.Cover lower 5.Repeat They are not “betting” — they are manufacturing inventory. The same 1 BTC can now support: •An ETF unit •A futures contract •A perpetual swap •An options delta •A broker loan •A structured note All at once. That is six claims on one coin. That is not a market. That is a fractional reserve price system.

Even if paper bitcoin was not involved, at some point whales were bound to sell. The energy to mine is not unlimited. Someone would want to cash out.

The ETFs, even unlevered, were the final straw. Expecting those who got in late to HODL is now a proven flawed idea.

Ten Key Points

  1. The bitcoin “Store of Value” trade has fundamentally broken in two. Unlike gold, which is mined with energy, but then remains “gold” regardless of how much mining energy is expended, bitcoin requires continual energy expenditure to maintain the bitcoin network.
  2. Maintaining a digital ledger requires a constant injection of ordered energy.
  3. The miners are currently doing the same amount of work for 27% less revenue. They have billions in sunk capex, and as long as bitcoin remains above the marginal cash cost of mining (~$85K), they will keep mining. This, in itself, is nothing new. It has always been the case that mining has periods of unprofitability.
  4. The difference this time is that bitcoin miners are no longer using “surplus” energy.
  5. AI datacenters pay 3-4x the revenue per kilowatt as bitcoin mining — and the miners are switching.
  6. Another “halving” in 2028 will reduce revenue per hash by 50% unless the bitcoin price increases by 100%. 
  7. The “Passive Bid” Has Diminished. For two years, the ETF complex provided a mindless, price-agnostic bid for bitcoin. That tap has slowed radically, and now bitcoin must find a new untapped bid.
  8. Absent endogenous cash flows (e.g. earnings, transaction fee share, dividends), bitcoin has no stabilizing feedback loop—only reflexive ones. Further declines do not summon value buyers; they merely test the resilience of belief.
  9. Bitcoin requires a massive, continuous calorie burn (electricity) just to prevent the network from collapsing. As energy prices rise (thanks to AI and the exhaustion of the 2010s surplus), the cost to maintain your “digital gold” rises.
  10. Gold is chemically inert. It sits in a vault. Its maintenance cost is effectively zero and largely unaffected by existing value.

After preaching for years about scarcity, the Bitcoin crowd cheered ETFs then 2x ETFs and -2x ETF. We have futures and options on futures.

Saylor borrowed billions of dollars to buy Bitcoin. Much of the Bitcoin crowd cheered that too.

Yet, Saylor nearly blew up doing that. But now he is leveraged safely, allegedly.

And we are supposed to believe Bitcoin is going to a million. Strike that. I mean 10 million.

And governments cannot stop it.

Add to that whales are bailing. Who exactly are the buyers when whales sell?

To top it off, miners now have better things to do with energy than mine Bitcoin.

Did Bitcoin “Digital Gold” Just Become Fool’s Gold?

In case you missed it, please see my January 11 post Did Bitcoin “Digital Gold” Just Become Fool’s Gold?

Bitcoin miners have better things to do than mine Bitcoin.

Saylor says Bitcoin would be $10 million tomorrow, if you knew what he does.

Why doesn’t he tell us, so we will all know?

If you still haven’t figured this out, Saylor is a charlatan who doesn’t know a damn thing.

Finally, if you are still convinced that Bitcoin is more that a speculative toy for market makers to whipsaw around, then go on believing.

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