"I Really Lost All My Money" — Terrifying Bitcoin Crash Leaves Retail Investors Screaming [Han Seung-gon's Insight]

[Financial News] "I was forcibly graduated from the market," "I went all-in with leverage and I’m really ruined," "I wish I could turn back time."

A man in his 30s, identified only as Mr. Kim, who works for a company in Gangnam in Seoul, stared blankly at his smartphone screen. The price of Bitcoin on the screen kept falling. Last November, when Bitcoin broke through $100,000, he invested 100 million won by combining his savings and bank loans. At the time, optimism that $200,000 was only a matter of time dominated the market. Now, however, his account shows a return of minus 45 percent.

The global virtual asset market is showing signs of an unprecedented structural breakdown and has fallen into panic. According to CoinMarketCap, a cryptocurrency market data site, more than $600 billion (about 870 trillion won) in global crypto market capitalization evaporated in the past 24 hours as of the 7th.
Bitcoin has fallen nearly 50 percent from its all-time high of $126,279 set last October, breaking far beyond the roughly 20 percent corrections seen in past bull markets. The Fear and Greed Index, which gauges market sentiment, has plunged to 8 out of 100, reviving the trauma of the 2022 Luna crisis and the collapse of FTX.


The trigger for the latest market crash was policy uncertainty coming out of Washington in the United States. Investors had initially expected interest rate cuts in the first half of 2026, but the mood at the Federal Reserve System (Fed) shifted abruptly. Despite a hiring freeze that saw U.S. corporate layoffs in January reach their highest level in 17 years, the Fed signaled it would maintain its tightening stance, citing persistent inflationary pressures.
In particular, the hawkish stance of Kevin Warsh, nominated as the next Fed chair, sent markets into convulsions. Wall Street warned that if the former Fed governor takes office, the era of high interest rates could last much longer than expected. As a result, risk asset markets that had been propped up by liquidity began to wobble, and highly volatile cryptocurrencies took a direct hit from what is being called the "Warsh shock."


Another major blow came from the sharp drop in the tech-heavy Nasdaq Stock Market (NASDAQ), amid growing doubts about the profitability of artificial intelligence (AI). Concerns mounted that big tech companies such as Nvidia and Microsoft (MS), despite massive AI investments, would fail to deliver the earnings growth investors had hoped for, intensifying risk-off sentiment.

Although MS recently reported quarterly revenue that beat market expectations, its share price plunged after it announced that capital expenditures for AI infrastructure had surged about 50 percent year-on-year. Nvidia also faced a double whammy of analysis suggesting its gross margin had peaked and concerns over delays in next-generation chip supply. In this environment, Bitcoin had been expected to decouple from equities as a form of "digital gold." In reality, however, its correlation with tech stocks has climbed to 0.80. This means that when the stock market falls by one unit, Bitcoin drops almost in the same direction and magnitude, underscoring that it has not escaped the category of risk assets.


Institutional money that had fueled the bull market turned toxic in the downturn. From the 3rd to the 6th, U.S. Bitcoin spot ETFs saw net outflows of more than $2.5 billion (about 3.6 trillion won), the largest weekly outflow on record. Even BlackRock’s iShares Bitcoin Trust (IBIT) shifted into net outflow. IBIT’s average purchase price is estimated at around $90,000, and as Bitcoin’s price collapsed to the low $60,000 range, it appears that even institutions dumped stop-loss orders to manage risk.

Forced liquidations in the futures market stepped on the accelerator of the decline. According to Coinglass data, liquidations of long positions—bets on rising prices—exceeded $2 billion in the past 24 hours. As Bitcoin lost support at $70,000 and then $65,000, highly leveraged positions were flushed out in a cascade of panic selling. The domestic market was also hit hard. The so-called "kimchi premium," which had spiked above 10 percent at the start of the crash, shrank rapidly to the 2 percent range during the sell-off, dealing a double blow to Korean investors.


Conditions for miners and whale investors have also reached a breaking point. After the halving, profitability deteriorated, and as Bitcoin’s price threatened the average mining cost range of $55,000 to $62,000, signs of miner "capitulation" emerged, with miners sending their holdings to exchanges. MicroStrategy, the listed company with the largest Bitcoin holdings, has also seen the price fall toward its average purchase cost of $59,224, effectively entering its break-even zone. In the market, pessimism is spreading that if large-scale selling by these players continues, the price could plunge into the $40,000 range.

Outlooks for Bitcoin could not be more polarized. Mike McGlone of Bloomberg Intelligence warned, "This is a normal bubble-bursting process, and it could fall to the $40,000 level." In contrast, Cathie Wood of ARK Invest countered, "The fundamentals have not changed, and we maintain our forecast that it will reach $1 million by 2030." On top of this, Europe’s MiCA, the world’s first comprehensive crypto regulation, is coming into full force, and global financial institutions such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) are raising their voices, saying the coin market must be regulated more strictly. With mounting pressure from the traditional financial system on all fronts, the virtual asset market is sinking into a fog where its future is impossible to see.


This episode has once again seared into investors’ minds the extreme volatility and risk of the virtual asset market. Bitcoin is now testing the psychologically important $60,000 support level. No one can say whether this crash is a healthy correction or the beginning of a prolonged slump. What is certain is that the economic environment and supply-demand dynamics surrounding the market are more unstable than ever.

Given these conditions, office workers who had ventured into crypto investing are voicing confusion on online communities. One salaried worker in his 30s confessed, "I got forcibly liquidated, and it finally woke me up." Another worker in his 40s said, "This may be the end of this investment season for me, but I’ll slowly build up my principal again and get back into the market."

hsg@fnnews.com Han Seung-gon Reporter