Crypto Selloff Explained: Bitcoin vs. Gold and 275K Traders Affected

Core Insights - Investors are increasingly comparing Bitcoin and gold as macroeconomic and geopolitical tensions affect both assets, leading to significant liquidations in the market [1][3] Group 1: Market Performance - Gold reached an all-time high of $5,608 per ounce on January 29 but subsequently fell by 4.7% to $5,180, with a market capitalization of over $36 trillion [1] - Bitcoin experienced a decline of 6.25% within 24 hours, trading at $82,600, following the US Federal Reserve's decision to maintain interest rates [2] - The global cryptocurrency market capitalization decreased by 5.9% to $2.8 trillion, resulting in a selloff of $220 billion [5] Group 2: Liquidation and Investor Sentiment - Total crypto liquidations surged by 385% to $1.71 billion in just 24 hours, affecting over 275,300 traders, with the largest position wiped out valued at $80.5 million [6] - The sentiment in the market has shifted back into the fear zone, as indicated by the significant liquidations and outflows from various investment products [5][7] - US-based spot Bitcoin exchange-traded funds recorded a net outflow of $817.9 million, while spot Ethereum ETFs saw a selloff of $155.6 million [7] Group 3: Geopolitical Factors - Negative sentiment regarding US tariffs on the EU and geopolitical tensions with Iran are contributing to the pressure on risk assets, including Bitcoin and gold [3] - Investors are debating whether Bitcoin should be classified as digital gold, a long-term store of value, or merely a risky investment [4]