Stocks, precious metals, and crypto were all affected, creating a pure 'liquidity black hole.'
On February 6, investors in USD assets found it hard to sleep.
Opening the trading software, the screen was filled with blood red. Bitcoin fell to 60,000 dollars at one point, evaporating 16% in 24 hours, down 50% from its previous high.
Silver plummeted like a kite with a broken string, falling 17% in a single day. The Nasdaq dropped 1.5%, and tech stocks were in disarray.
In the crypto market, 580,000 people were liquidated, and 2.6 billion dollars vanished.
But the strangest thing is: no one knows exactly what happened?
There was no Lehman collapse, no black swan events, and not even any decent bad news. U.S. stocks, silver, and cryptocurrencies all plunged simultaneously.
When 'safe-haven assets' (silver), 'tech faith' (U.S. stocks), and 'speculative casinos' (cryptocurrencies) all collapse at the same time, the message the market conveys may only be one: liquidity is gone.
U.S. stocks: bubbles burst during earnings season
After the market close on February 4, AMD presented a beautiful report card: revenue and profits all exceeded expectations. CEO Lisa Su said on the conference call: we are entering 2026 with strong momentum.
Then stock prices plummeted by 17%.
Where is the problem? Q1 revenue guidance is 9.5 to 10.1 billion dollars, with a midpoint of 9.8 billion. This number exceeds Wall Street's consensus expectation (9.37 billion), which should be a reason to cheer.
But the market does not accept it.
Those most aggressive analysts, those shouting 'AI revolution' and giving AMD sky-high target prices, are expecting '10 billion+'. A 2% miss is a sign of 'slowing growth' in their eyes.
The result was a widespread liquidation. AMD plummeted 17%, losing hundreds of billions in market value overnight; the Philadelphia Semiconductor Index fell over 6%; Micron Technology dropped over 9%, SanDisk fell 16%, and Western Digital dropped 7%.
The entire chip sector was dragged down by AMD alone.
AMD's wounds have not healed, and Alphabet dealt another blow.
After the market close on February 6, Google's parent company released its earnings report. Revenue and profits exceeded expectations, with cloud business growing by 48%. CEO Sundar Pichai was pleased: AI is driving growth across all our businesses. Then, CFO Anat Ashkenazi threw out a number: 'In 2026, we plan to invest 175 to 185 billion dollars in capital expenditures.'
Wall Street was collectively stunned.
This number is twice Alphabet's last year's (91.4 billion) and 1.5 times Wall Street's expectation (119.5 billion). Equivalent to burning 500 million dollars every day for an entire year.
Alphabet's stock price plummeted 6% after hours, then twitched and rebounded, falling again, ultimately barely holding steady, but panic and concern have already spread through the market.
This is the true AI arms race of 2026: Google burns 180 billion, Meta burns 115 to 135 billion, and Microsoft and Amazon are also throwing money around. The four tech giants are set to burn over 500 billion dollars this year.
But no one knows where the endpoint of this arms race is. It's like two people standing on the edge of a cliff, pushing each other; whoever stops first will be pushed down.
The gains of the seven tech giants in 2025 almost entirely come from 'AI expectations'. Everyone is betting: although it's expensive now, AI will allow these companies to make a fortune, so buying now isn't a loss.
But when the market realizes that 'AI is not a money printer, but a money burner', the overvalued capital expenditure becomes the sword of Damocles hanging over our heads.
AMD is just the beginning. Every less-than-perfect earnings report could trigger a new round of liquidation.
Silver: from 'the gold of the poor' to a liquidity sacrificial offering
In one month, it rose 68%, then fell 50% in three days.
Since January, silver has shown a curve that has left everyone astonished.
At the beginning of the month, it was still hovering around 70 dollars, and by the end of the month, it surged to 121 dollars.
Social media once ignited a 'silver frenzy'. The silver section on Reddit was filled with 'Diamond Hands' (referring to steadfast holders), and Twitter was full of posts saying 'silver is going to the moon', 'industrial demand is exploding', and 'solar panels can't do without silver'.
Many people really believed that 'this time is different'. Solar energy demand, AI data centers, electric vehicles, these tangible industrial demands, combined with five consecutive years of supply deficits, all looked like the golden age for silver.
Then on January 30, silver fell 30% in one day.
From 121 dollars it plummeted directly to around 78 dollars. This is the most brutal single-day collapse of silver since the 'Hunt brothers incident' in 1980. That year, two Texas tycoons attempted to corner the silver market, but were forcibly liquidated by the exchange, leading to a market crash.
45 years have passed, and history repeats itself.
On February 6, silver fell another 17%. Those who 'bought the dip' at 90 dollars watched their money evaporate again.
Silver is very special; it is both 'the gold of the poor' (a safe-haven asset) and an 'industrial necessity' (used in solar panels, phones, and cars).
In a bull market, this is a double blessing: the economy is good, industrial demand is strong; the economy is bad, safe-haven demand increases. It can rise no matter what.
But once in a bear market, this becomes a double curse.
The source of the crash can be traced back to January 30, when Trump announced the nomination of Kevin Warsh as the new Federal Reserve chairman, leading to a 31.4% plunge in silver that day, the largest single-day drop since 1980.
Warsh is a well-known hawk who advocates maintaining high interest rates to control inflation. His nomination meant that market concerns about 'the Fed losing independence', 'disordered monetary policy', and 'out-of-control inflation' suddenly cooled, and these concerns were precisely the core drivers of the explosive rise in gold and silver in 2025. On the day of Warsh's nomination, the dollar index rose by 0.8%, and all safe-haven assets (gold, silver, yen) were sold off simultaneously.
Looking back at this crash, three things happened in 48 hours.
On January 30, the Chicago Mercantile Exchange suddenly announced: silver margin requirements increased from 11% to 15%, and gold from 6% to 8%.
Meanwhile, market makers are starting to withdraw.
Saxo Bank's commodity strategy chief Ole Hansen bluntly stated: 'When volatility is too high, banks and brokers will exit the market to manage their own risks, and this retreat will actually exacerbate price volatility, triggering stop-loss orders, margin calls, and forced sell-offs.'
The strangest thing is that just when silver was experiencing the most volatile fluctuations, the London Metal Exchange (LME) trading system suddenly 'experienced technical issues', delaying the opening by an hour.
A few events coincided almost on the same day, causing silver to drop from 120 dollars to 78 dollars, a single-day drop of 35%, with countless people getting liquidated.
Is it a coincidence? Or is it a meticulously designed 'liquidity trap'? No one knows the answer. But the silver market has since left a deep scar.
Cryptocurrency: the delayed funeral is finally held
In one sentence, the recent continuous plunge in cryptocurrency can be summarized as: this is a delayed funeral.
In early February, Bitwise's Chief Investment Officer Matt Hougan published an article with a very straightforward title (The Depths of Crypto Winter), in which his analysis concluded that the bull market had ended as early as January 2025.
In October 2025, BTC soared to a historic high of 126,000 dollars, with everyone cheering that '100,000 dollars is just the beginning', but Hougan believes this brief bull market is artificially maintained.
In 2025, Bitcoin ETFs and DAT companies (Digital Asset Treasury companies) bought a total of 744,000 Bitcoins, worth approximately 75 billion dollars.
Comparing one data point, in 2025, Bitcoin's new mining output is about 160,000 coins (after halving). This means institutions bought 4.6 times the new supply.
In Hougan's view, if it weren't for this 75 billion dollar buy order, Bitcoin might have dropped 60% by mid-2025.
The funeral was delayed for 9 months, but it will eventually be held.
But why, in comparison, did cryptocurrencies suffer the most?
In institutions' 'asset lists', there is an invisible ranking:
Core assets: U.S. Treasuries, gold, blue-chip stocks, only sold as a last resort in a crisis.
Secondary core assets: corporate bonds, large-cap stocks, real estate, start selling when liquidity tightens.
Marginal assets: small-cap stocks, commodity futures, cryptocurrencies, are the first to be sacrificed.
In the face of a liquidity crisis, cryptocurrencies are always the first to be sacrificed.
This is also due to the characteristics of cryptocurrencies themselves. They have the best liquidity, are traded 24/7, can be liquidated at any time, and carry the least moral burden with the least regulatory pressure.
So, whenever institutions need cash, whether to top up margins, close positions to stop losses, or because the boss suddenly orders to 'reduce risk exposure', the first to be sold is always cryptocurrencies.
When U.S. stocks and gold and silver prices reversed and entered a downward trend, cryptocurrencies were also innocently sold off and became fuel for margin calls.
However, Hougan also believes that the crypto winter has lasted a long time, and spring is definitely not far away.
The real epicenter: Japan's overlooked time bomb?
Everyone is looking for the culprit: was it AMD's earnings report? Was it Alphabet burning money? Was it Trump's nomination of the Fed chair?
The real epicenter may have been buried as early as January 20.
That day, the yield on Japan's 40-year government bonds broke 4%, the first time since that tenure was introduced in 2007, and the first time any Japanese government bond has broken 4% in over 30 years.
For decades, Japanese government bonds have been the 'safety net' of the global financial system. Interest rates close to zero, or even negative, are as stable as a rock.
Global hedge funds, pensions, and insurance companies are all playing a game called 'yen carry trade':
Borrowing yen at ultra-low interest rates in Japan, converting to dollars, buying U.S. Treasuries, tech stocks, or cryptocurrencies, and then profiting from the interest rate differential.
As long as Japanese government bond yields remain stable, this game can be played indefinitely. How big is the market? No one can say for sure, but conservative estimates put it at least in the trillions of dollars.
As the yen enters a rate hike cycle, the scale of yen carry trades gradually shrinks, but after January 20, this carry trade game directly entered hell mode, even liquidation mode.
Japanese Prime Minister Fumio Kishida announced an early election, promising tax cuts and increased fiscal spending. The problem is that Japan's government debt ratio has already reached 240% of GDP, the highest in the world. With further tax cuts, how to repay the debt?
The market exploded, Japanese government bonds were sold off wildly, and yields skyrocketed. The yield on the 40-year government bond rose by 25 basis points in one day, a level of volatility unseen in Japan for 30 years.
When Japanese government bonds collapsed, the chain reaction began:
As the yen appreciates, those funds that borrowed yen to buy U.S. Treasuries, stocks, and Bitcoin suddenly find their repayment costs skyrocketing. They either close positions immediately to stop losses or wait to be liquidated.
U.S. Treasuries, European bonds, and all 'long-duration assets' were also sold off because investors needed cash.
Stocks, precious metals, and cryptocurrencies all suffered. When even 'risk-free assets' are being sold off, other assets naturally have no chance of escape.
This is why 'safe-haven assets' (silver), 'tech faith' (U.S. stocks), and 'speculative casinos' (cryptocurrencies) all collectively plunged at the same time.
A pure 'liquidity black hole'.
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