The latest crypto market crash has erased roughly $390 billion in value, sending bitcoin and ether tumbling toward their worst weekly losses since the FTX collapse in November 2022. A brutal stretch of selling, fueled by a rare combination of bearish forces, left investors reeling and digital asset markets searching for a bottom.

What began with a single notable bitcoin sale by one of crypto’s biggest believers ended as one of the largest market drawdowns in years — a week that tested the conviction of even the most committed holders.

The Scale of the Damage

The numbers behind this selloff paint a stark picture of just how severe the week was.

Bitcoin fell 17.3% over the week, while ether dropped a steeper 22%, putting both assets on track for their largest weekly declines since November 2022. That was when the collapse of Sam Bankman-Fried’s FTX exchange triggered a market-wide panic — making this week’s comparison especially alarming for investors.

Despite a modest stabilization on Saturday, both assets remained near their lows. Bitcoin was trading just above $60,000, while ether changed hands around $1,550.

A Market-Wide Wipeout

The pain extended far beyond the two largest cryptocurrencies.

The digital asset market shed roughly $390 billion in value during the week, leaving total market capitalization hovering just above $2 trillion, according to TradingView data. To put that in perspective, that’s less than half of the nearly $4.2 trillion peak the market reached back in October.

The Derivatives Bloodbath

It wasn’t only spot prices that suffered — leveraged traders were hit especially hard.

Crypto derivatives traders endured one of the largest wipeouts of the year. According to CoinGlass data, roughly $7 billion in leveraged positions were liquidated across digital assets during the week, with Monday and Friday delivering the most severe flushes.

Notably, about $5.7 billion of those liquidations were long positions — bullish bets on higher prices. That imbalance shows just how many traders were caught off guard by the downward move.

Why Crypto Crashed This Week

What made this selloff so punishing was the way several bearish forces converged at the same time. No single cause was responsible; instead, it was a pileup of negative catalysts.

The key pressures included:

• A surprise bitcoin sale by Strategy, the largest corporate holder
• Heavy ETF outflows and a rotation toward AI investments
• A major vulnerability discovered in a privacy-focused crypto
• A strong U.S. jobs report reigniting Fed rate-hike fears

Each of these deserves a closer look.

Strategy’s Surprising Sale

The week opened with a jolt from an unexpected source.

Strategy, the largest corporate holder of bitcoin, disclosed that it had sold BTC for the first time in nearly four years. The transaction itself was tiny — just 32 BTC worth roughly $2.5 million — but the symbolism was enormous. Investors had long viewed Michael Saylor’s company as a perpetual source of demand, so even a token sale rattled confidence.

The unease deepened as investors began questioning whether Strategy might need to sell more bitcoin to help cover obligations tied to its growing stack of preferred equities.

ETF Outflows and the Pull of AI

At the same time, bitcoin ETFs continued to bleed assets, adding steady downward pressure throughout the week.

K33 Research head Vetle Lunde argued that some of those outflows reflected a broader rotation of capital away from crypto and into artificial intelligence investments. With AI-related stocks pushing to record highs and investors anticipating potential IPOs from companies such as OpenAI, Anthropic, and SpaceX, Lunde noted that the opportunity cost of holding bitcoin had become increasingly hard for some investors to ignore.

In other words, money that might once have flowed into crypto was finding a more attractive home in the booming AI sector.

When AI Turned on Crypto

In a fascinating twist, AI didn’t just compete with crypto for investment — it actively exposed weaknesses in it.

Concerns about AI’s ability to uncover flaws in crypto protocols added to the week’s pressure. Zcash, which had been one of the best-performing cryptocurrencies earlier this year, tumbled more than 40% after researchers used Anthropic’s latest AI model to uncover a critical vulnerability in the network’s privacy system. The episode raised broader questions about how AI tools might reshape security expectations across the crypto landscape.

The Final Blow: Jobs Data and Rate Fears

The week’s last major hit came from the macroeconomic front.

A stronger-than-expected U.S. jobs report on Friday forced investors to rethink the Federal Reserve’s next move. Markets that earlier in the year had anticipated rate cuts increasingly began to expect that the central bank could hike rates if inflation remains stubbornly high.

The ripple effects were significant. U.S. Treasury bond yields surged, and the Nasdaq 100 suffered its worst day since the tariff-driven selloff in April 2025, snapping a record-setting rally that had powered much of Wall Street’s enthusiasm this year. Crypto, already under strain, had little chance against that backdrop.

A Pause, Not Necessarily a Bottom

For now, the relentless selling appears to have eased — at least temporarily.

With traditional markets closed for the weekend and crypto prices stabilizing on Saturday, the immediate pressure lifted somewhat. But the calm may prove fragile.

The big question is whether this week’s rout marked the kind of capitulation that often signals a market bottom, or whether it was simply the latest chapter in an ongoing downtrend. The answer likely hinges on the broader macro picture.

Why This Matters

This selloff is significant not just for its size but for what it reveals about the forces now shaping crypto markets.

A few themes stand out:

• The comparison to the FTX-era crash underscores how rare and severe this drawdown is.
• The growing influence of AI — both as a competitor for capital and as a tool exposing crypto vulnerabilities — marks a new dynamic for the industry.
• Macroeconomic factors like interest rates and bond yields continue to exert powerful influence over digital assets.

What Comes Next

The path to recovery faces several clear hurdles. Higher bond yields, lingering rate-hike fears, and continued competition from AI investments and high-profile IPOs all stand in the way of a quick rebound.

Whether crypto stabilizes from here or slides further may depend less on developments within the industry and more on the macro environment surrounding it. For now, investors are left to assess the wreckage of a punishing week and wait to see whether this crypto market crash represents a turning point or merely another step down a longer road.

As the dust settles, one thing is clear: the convergence of corporate sales, capital rotation, AI disruption, and shifting Fed expectations has reminded the market just how quickly sentiment can turn — and how interconnected crypto has become with the broader financial world.