Today, Bitcoin once plunged nearly 8%, falling to around $70,000. The world's second-largest cryptocurrency, Ethereum, once dropped over 8%, falling below $2,100. The third-ranked cryptocurrency, XRP, once plummeted over 10%, reported at $1.42. The entire virtual currency market capitalization plummeted nearly 7%, bringing the total market value to around $2.48 trillion, with a daily loss of approximately $186 billion (equivalent to nearly 1.3 trillion RMB). So, what exactly happened?

Previously, U.S. Treasury Secretary Scott Minuchin hinted that the U.S. government would not bail out cryptocurrencies. This may have been the trigger for the virtual currency market crash. Subsequently, well-known investor Michael Burry warned that the continued decline in Bitcoin prices could 'trigger a death spiral, leading to a massive collapse in value.' This led to the unleashing of selling pressure.

Crash-like sell-off

This year, the virtual currency market has been worse than gold and silver. Today, Bitcoin fell below $71,000, approaching the next support level of $70,000. Ethereum plummeted over 8%, dropping below the $2,100 support level. Other cryptocurrencies also saw a widespread sell-off.

According to CoinGlass data statistics, in the last 24 hours, there have been a total of 176,200 liquidations globally, with a total liquidation amount of $871 million. The largest single liquidation occurred in Aster - BTCUSDT, valued at $11.366 million.

Bitcoin has declined on 7 out of the past 8 trading days, falling more than 40% from the record high of $126,000 set last October. After Bitcoin dropped below $75,000, it triggered stop-loss orders, leading to a large number of leverages being liquidated, especially in the derivatives market, which exacerbated the situation.

Fundstrat's head of digital assets, Sean Farrell, stated that the $70,000 mid-range is a reasonable support area, as the intraday high around $74,000 in March 2024 and the intraday low during the tariff-driven sell-off in April 2025.

Farrell wrote in a statement: 'Given other conditions being equal, the levels reached last weekend and the observed yield levels will bring a more attractive short-term risk/reward.' The strategist also warned that market conditions are still declining, with 'sufficient holding risks in traditional markets that may negatively impact the crypto market.'

Bensant ignited

Before this round of Bitcoin's plunge, U.S. Treasury Secretary Scott Bensant hinted that the U.S. government would not bail out cryptocurrencies. In a heated debate during the House Financial Services Committee on Wednesday, Bensant was asked whether the U.S. Treasury had the authority to purchase Bitcoin or other cryptocurrencies. Bensant stated, 'I do not have the authority to do so, and as the chair of the Financial Stability Oversight Council (FSOC), I do not have that authority either.'

FSOC has notably softened its stance on crypto assets and stablecoins in its latest 2025 annual report, no longer continuing the previous strong statements that viewed them as a systemic financial risk. FSOC stated that the (GENIUS Act), which took effect in July this year, has established a federal regulatory framework for payment-based stablecoins, bringing regulatory clarity that helps promote innovation in U.S. domestic stablecoins while controlling risks. FSOC did not repeat the warnings from the 2024 report regarding stablecoins being 'prone to runs' and the potential for market concentration to amplify systemic risks, and it downplayed concerns about illegal activities, stating that the vast majority of on-chain transactions are for legitimate purposes. FSOC believes that the U.S. regulatory focus on crypto assets is shifting from 'risk warning' to 'institutional integration.'

Additionally, prominent investor Michael Burry warned that the continued decline in Bitcoin prices could 'trigger a death spiral, leading to a massive value collapse,' asserting that Bitcoin has been revealed as a purely speculative asset, far from serving as a hedge against depreciation like gold and other precious metals. Burry gained fame for predicting the 2008 financial crisis.