Key Takeaways
- • Bitcoin has declined nearly 50% from its October 2025 all-time high, trading in the mid-$60,000 range following a staggering February 5 drop from $72,000 to $60,000, according to Bitwise CIO Matt Hougan.
- • Bitwise's chief investment officer stated on February 19 that Bitcoin has not yet reached a "final cathartic bottom," suggesting additional price volatility and potential further downside remain likely in the near term.
- • Bitcoin has functioned as a risk-on asset rather than "digital gold" during recent geopolitical and macroeconomic turmoil, contrasting sharply with precious metals—gold rallied to new all-time highs above $5,000 while silver surged, undermining the debasement narrative that had supported Bitcoin.
- • Loss of confidence in the AI trade, combined with geopolitical tensions and macro uncertainty, has driven institutional and retail investors away from Bitcoin, though Hougan expects recovery sometime during 2026.
- • Hougan warned of potential additional "shakeout" events similar to the February 5 liquidation, cautioning that investors should not assume current price levels represent a market bottom.
Summary
Bitcoin has experienced a substantial correction from its October 2025 peak, with the asset declining nearly 50% to trade in the mid-$60,000 range as of mid-February 2026. The most acute selloff occurred on February 5, when Bitcoin plummeted from $72,000 to $60,000 in a single event. Despite some stabilization following that liquidation, Bitwise Chief Investment Officer Matt Hougan stated on the Blockspace podcast on February 19 that the cryptocurrency has likely not yet reached its ultimate bottom.
"The February 5 event was shocking, but I'm not sure it was the final cathartic bottom," Hougan said, emphasizing that while recovery is expected sometime in 2026, the market remains "in the depths of it." He characterized the current environment as potentially subject to additional sharp declines, noting that "there's often one or two big shakeouts" and that he "wouldn't be shocked to see another event like that at some point in the future."
The recent selloff has been driven by multiple factors converging simultaneously. A deterioration in confidence surrounding the artificial intelligence trade, combined with heightened geopolitical tensions and broader macroeconomic uncertainty, has prompted both institutional and retail investors to exit Bitcoin positions. Notably, Bitcoin's behavior during this downturn has diverged significantly from traditional safe-haven narratives. Rather than functioning as "digital gold," Bitcoin has instead acted as a risk-on asset, declining sharply while precious metals have rallied—gold surged to new all-time highs above $5,000 and silver advanced substantially. This divergence has undermined the debasement argument that had previously supported Bitcoin, catching many bulls off guard.
Hougan suggested that the market downturn may have commenced earlier than commonly recognized, though the October 2025 liquidation event remains a significant marker. The current cycle reflects a maturing institutional market structure increasingly driven by Bitcoin ETFs and regulated financial products, a structural shift that may produce different price dynamics than previous crypto cycles.
"The February 5 event was shocking, but I'm not sure it was the final cathartic bottom," Hougan said, emphasizing that while recovery is expected sometime in 2026, the market remains "in the depths of it." He characterized the current environment as potentially subject to additional sharp declines, noting that "there's often one or two big shakeouts" and that he "wouldn't be shocked to see another event like that at some point in the future."
The recent selloff has been driven by multiple factors converging simultaneously. A deterioration in confidence surrounding the artificial intelligence trade, combined with heightened geopolitical tensions and broader macroeconomic uncertainty, has prompted both institutional and retail investors to exit Bitcoin positions. Notably, Bitcoin's behavior during this downturn has diverged significantly from traditional safe-haven narratives. Rather than functioning as "digital gold," Bitcoin has instead acted as a risk-on asset, declining sharply while precious metals have rallied—gold surged to new all-time highs above $5,000 and silver advanced substantially. This divergence has undermined the debasement argument that had previously supported Bitcoin, catching many bulls off guard.
Hougan suggested that the market downturn may have commenced earlier than commonly recognized, though the October 2025 liquidation event remains a significant marker. The current cycle reflects a maturing institutional market structure increasingly driven by Bitcoin ETFs and regulated financial products, a structural shift that may produce different price dynamics than previous crypto cycles.
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