Bitcoin's Wild Ride: What Just Happened?

Crypto just had one of those weeks. You know, the kind where you check your portfolio and immediately wish you hadn't. Bitcoin crashed hard, over $2 billion in bets went up in smoke, and suddenly everyone's remembering that crypto and stocks might not be so different after all. Let's break down what happened and what it means.

Bitcoin just face-planted to around $80,600 on Friday—its lowest point in seven months. That's a 36% drop from its high of over $120,000 back in October. All those 2025 gains? Gone. Poof. Vanished.

The crash triggered over $1.9 billion in forced liquidations, which is fancy talk for "nearly 391,000 people who borrowed money to bet on Bitcoin going up just got their accounts wiped out."

So what happened? A few things, actually:

The entire crypto market has lost over $1 trillion since October—from $4.2 trillion down to $2.8 trillion. That's a 33% haircut if you're keeping score.

But here's the twist: some smart people think this bloodbath might actually be good news. Historically, when everyone's terrified, that's often been a great time to buy. Not financial advice, obviously, but worth noting.

The bottom line: When Bitcoin said "to the moon," nobody mentioned it might take the express elevator back down first.

In a single 24-hour period, over $2 billion worth of positions got liquidated. That's not a typo—$2 billion, with a B.

Here's how the damage broke down:

About 90% of these were "long positions"—people betting prices would go up. Spoiler alert: they did not.

The worst single hit? Someone lost $36.78 million on one Bitcoin bet. One. Trade. That's "I should've just bought a yacht" money.

Bitcoin's price dropped like a rock from $85,000 straight down to exactly $82,000, then just... stopped. That perfect landing at a round number is suspicious—either big money stepped in to buy, or the system just ran out of people to liquidate.

There are also whispers that multiple crypto hedge funds are in serious trouble and might need to sell billions more to cover their losses. Unconfirmed, but would explain why the selling felt so aggressive.

The bottom line: Borrowing money to gamble on crypto remains a spectacularly bad idea during crashes.

Here's an uncomfortable truth that's becoming harder to ignore: Bitcoin increasingly moves just like regular stocks.

Bitcoin and the S&P 500 now move together more than 70% of the time. So much for being an "alternative" asset class, right?

When Bitcoin dropped 33% recently, traditional markets felt the pain too. Some people now think Bitcoin is actually a leading indicator for the stock market—meaning it crashes first, then stocks follow.

Why are they moving together? Same reasons affect both:

Here's the ironic part: Bitcoin is supposed to be "digital gold"—a safe place to hide when everything else is falling apart. But its correlation with actual gold? Basically zero. Instead, Bitcoin moves like risky tech stocks, not like the safety blanket people hoped for.

This raises a big question: if crypto crashes whenever stocks crash, what's the point of owning it for "diversification"? That's like buying two different brands of the same thing and calling it variety.

The bottom line: Bitcoin might be decentralized money, but it's apparently not immune to Wall Street vibes.

A few lessons from this mess:

Borrowing money to buy crypto is playing with fire. It works great until it very much doesn't, and then you lose everything while also owing money. Fun!

Crypto and stocks aren't as different as we thought. If you own both thinking you're diversified, you might want to reconsider that strategy.

Panic often comes before recovery. Not always, but historically, extreme fear has marked good buying opportunities. Whether this time is different? Nobody knows, and anyone who says they do is lying.

Whether this is just a temporary freakout or the start of something worse depends on what happens next with the economy, what big institutions do, and what regulators decide.

For now? Keep some cash ready, don't bet the farm on borrowed money, and buckle up because this ride probably isn't over.

Bitcoin Crash Data:

Liquidation Information:

Crypto-Stock Correlation: