February 6, investors in US dollar assets had difficulty sleeping.
Opening the trading software, the screen was filled with blood red. Bitcoin once dropped to 60,000 dollars, evaporating 16% in 24 hours, down 50% from its previous high.
Silver plummeted 17% like a kite with a broken string. The Nasdaq fell 1.5%, and the tech stocks were in disarray.
In the crypto market, 580,000 people were liquidated, and 2.6 billion dollars vanished into thin air.
But the strangest thing is: no one knows what exactly happened?
There was no Lehman collapse, no black swan event, not even a decent piece of bad news. US stocks, silver, and cryptocurrencies all plunged at the same time.
When “safe-haven assets” (silver), “tech faith” (U.S. stocks), and “speculation casinos” (crypto) all collapse at the same time, the message the market is sending might be just one thing: liquidity is gone.
U.S. stocks: the bubble bursts during earnings season
After the close on February 4, AMD turned in a great report: revenue and profits beat expectations across the board. CEO Lisa Su said on the call: “We’re entering 2026 with strong momentum.”
Then the stock price crashed 17%.
Where’s the problem? Q1 revenue guidance is $9.5–$10.1 billion, with a midpoint of $9.8 billion. This number exceeds Wall Street consensus expectations ($9.37 billion)—so people should be celebrating.
But the market doesn’t buy it.
Those most aggressive analysts—the ones calling it an “AI revolution” and throwing out eye-popping price targets for AMD—they were expecting “$10 billion+.” Even if it’s off by 2%, in their eyes that’s a signal of “slowing growth.”
The result was a full stampede. AMD plunged 17%, with its market value evaporating by tens of billions overnight; the Philadelphia Semiconductor Index crashed more than 6%; Micron Technology fell more than 9%; SanDisk dropped 16%; and Western Digital fell 7%.
The entire chip sector got dragged down by AMD alone.
AMD’s wound wasn’t even healed when Alphabet added another blow.
On the night of February 6, the earnings report from Alphabet’s parent company was released. Revenue and profits again came in broadly above expectations: cloud business growth of 48%. CEO Sundar Pichai was feeling smug: “AI is driving growth in all our businesses.” Then CFO Anat Ashkenazi tossed out a number: “In 2026, we plan to invest $175–185 billion in capital expenditures.”
Wall Street was collectively baffled.
That number is double Alphabet’s last year figure ($91.4 billion) and 1.5 times Wall Street’s expectation ($119.5 billion). It’s like burning $500 million a day, every day, for an entire year.
Alphabet’s stock price plunged 6% after-hours, then lurched in and out—rallied, fell again—eventually managing to end roughly flat. But panic and worry had already spread through the market.
This is the real AI arms race of 2026: Google burns $180 billion, Meta burns $115–135 billion, and Microsoft and Amazon are also throwing money around wildly. The four tech giants are set to spend a combined more than $500 billion this year.
But nobody knows where this arms race will end. It’s like two people standing at the edge of a cliff shoving each other—whoever stops first gets pushed off.
In 2025, almost all the gains for the seven tech giants came from “AI expectations.” Everyone’s betting: even though these companies are expensive now, AI will make them earn hand over fist—so buying now means you won’t lose.
But once the market realized that “AI isn’t a money-printing machine—it’s a money-burning machine,” the sky-high capital expenditures priced for over-optimism became a sword of Damocles hanging overhead.
AMD was just the beginning. Next, every earnings report that isn’t quite perfect could trigger the next round of stampede.
Silver: from the “poor man’s gold” to a liquidity sacrifice
Up 68% in a month, down 50% in three days.
From January to now, silver has traced a curve that leaves everyone in shock.
At the start of the month it was still hovering around $70. By the end of the month it surged to $121.
For a while, social media kicked off “silver mania.” Reddit filled the silver forums with “Diamond Hands” (people firmly holding on). On Twitter, posts were everywhere: “Silver is going to the moon,” “industrial demand is exploding,” and “solar panels can’t do without silver.”
Many people really believed “this time is different.” Solar demand, AI data centers, and electric vehicles—these are real industrial needs. Add five straight years of supply deficits, and it looks like silver’s golden age, no matter how you look at it.
Then, on January 30, silver fell 30% in a single day.
It was smashed straight from $121 down to around $78. This was the most brutal single-day collapse in silver since the 1980 “ Hunt brothers incident.” That year, two Texas billionaires tried to monopolize the silver market, and in the end the exchange forced them to close positions, triggering a market crash.
Forty-five years later, history repeats itself.
On February 6, silver fell another 17%. Those who “bought the dip” at $90 watched their money evaporate again right before their eyes.
Silver is special. It’s both “the poor man’s gold” (a safe-haven asset) and an “industrial necessity” (used in solar panels, phones, and cars).
During a bull market, it’s a double good thing: the economy is doing well and industrial demand is strong; when the economy is bad, safe-haven demand rises. Either way, it can go up.
But once you enter a bear market, this becomes a double curse.
The source of the plunge goes back to January 30. That day, Trump announced the nomination of Kevin Warsh as the new Fed chair. Silver then fell 31.4% that day—its biggest one-day drop since 1980.
Warsh is a famous hawk who argues for keeping high rates to control inflation. His nomination immediately cools market worries about the Fed losing independence, monetary policy falling into chaos, and inflation getting out of control—exactly the core drivers that pushed gold and silver to surge in 2025. On the day Warsh was nominated, the U.S. dollar index rose 0.8%, and all safe-haven assets (gold, silver, and the yen) were sold off simultaneously.
Looking back on this crash, three things happened one after another within 48 hours.
On January 30, the Chicago Mercantile Exchange suddenly announced that silver margin would rise from 11% to 15%, and gold from 6% to 8%.
Meanwhile, market makers began to withdraw.
Saxo Bank’s head of commodity strategy, Ole Hansen, bluntly said: “When volatility gets too high, banks and brokers exit the market, managing their own risk. But that retreat actually amplifies price swings—triggering stop-loss orders, margin calls, and forced sell-offs.”
The strangest part is that, right when silver volatility was at its worst, the London Metal Exchange (LME)’s trading system suddenly had “technical problems,” delaying the opening by an hour.
A few things piled up almost on the same day. Silver fell from $120 to $78, a 35% single-day drop. Countless people got liquidated and exited.
Is it a coincidence? Or has someone carefully designed a “liquidity trap”? Nobody knows the answer. But from then on, the silver market left yet another deep scar.
Crypto: the postponed funeral finally takes place
One-sentence summary of the recent sustained plunge in crypto: it’s a postponed funeral.
In early February, Bitwise Chief Investment Officer Matt Hougan published an article titled very plainly (The Depths of Crypto Winter). His analysis was that the bull market ended as early as January 2025.
In October 2025, BTC surged to a new all-time high of $126,000. Everyone cheered, “Six figures is just the beginning.” Hougan believes this brief bull run was artificially maintained.
Throughout 2025, Bitcoin ETFs and the DAT company (the Digital Assets Treasury Company) bought a total of 744,000 bitcoins, worth about $75 billion.
Compare one data point: over all of 2025, Bitcoin’s additional mined output was about 160,000 coins (after the halving). In other words, institutions bought 4.6 times the newly supplied amount.
In Hougan’s view, without that $75 billion in buying pressure, Bitcoin might have dropped 60% by mid-2025.
The funeral was postponed by nine months, but it still had to happen.
But why did crypto fall the hardest by comparison?
In institutional “asset inventories,” there’s an invisible ranking:
Core assets: U.S. Treasuries, gold, blue-chip stocks—sold only at the very last moment in a crisis.
Secondary assets: corporate bonds, large-cap stocks, real estate—when liquidity tightens, they start selling.
Marginal assets: small-cap stocks, commodity futures, and cryptocurrencies—the first to be sacrificed.
In a liquidity crisis, crypto is always sacrificed first.
This also comes from crypto’s own characteristics: it has the best liquidity, trades 24/7, can be converted to cash anytime, and carries the lightest moral burden with the least regulatory pressure.
So whenever institutions need cash—whether to top up margin, close out stop-loss positions, or when the boss suddenly orders “reduce risk exposure”—the first asset sold is always crypto.
When U.S. stocks and gold/silver sentiment reversed and entered a downtrend, crypto was also innocently dumped, becoming fuel for margin calls.
Hougan also believes the crypto winter has lasted a long time, though—spring is definitely not far off.
The real epicenter: Japan’s ignored ticking time bomb?
Everyone is looking for the culprit: was it AMD’s earnings report? Was it Alphabet burning cash? Was it Trump’s nomination of a Fed chair?
Perhaps the real epicenter was buried as early as January 20.
That day, Japan’s 40-year government bond yield broke 4%. It was the first time since that term was introduced in 2007, and the first time any Japanese bond maturity had broken 4% in over 30 years.
Over the past few decades, Japan’s government bonds have been the “safety cushion” of the global financial system. With interest rates near zero, even negative, they’ve been as solid as a rock.
Global hedge funds, pension funds, and insurance companies are all playing a game called “yen carry trade”:
In Japan, borrow yen at ultra-low rates, swap into dollars, buy U.S. Treasuries, tech stocks, or even cryptocurrencies—then earn the interest spread.
As long as Japan’s government bond yields don’t move, this game can go on indefinitely. How big is the market? Nobody can say for sure, but conservative estimates put it at at least several trillion dollars.
As the yen entered a rate-hike cycle, the scale of the yen carry trade gradually shrank. But after January 20, this carry-trade game directly entered hell mode—further, liquidation mode.
Japan’s Prime Minister Sanae Takamichi announced an early election, promising tax cuts and increased fiscal spending. The problem is that Japan’s government debt-to-GDP ratio is already as high as 240%, the highest in the world. If you cut taxes, how will you repay the debt?
The market blew up—Japan’s government bonds were dumped aggressively, and yields surged. In one day, the 40-year Treasury yield jumped by 25 basis points. Such volatility has never been seen in Japan in 30 years.
When Japan’s government bond market collapses, the chain reaction begins:
As the yen strengthens, funds that borrowed yen to buy U.S. Treasuries, stocks, or Bitcoin suddenly discover that repayment costs have skyrocketed. Either close positions immediately to limit losses, or wait for liquidation.
U.S. Treasuries, European sovereign debt, and all “long-duration assets” were dumped too, because investors need cash.
Stocks, precious metals, and cryptocurrencies all got hit at once. When even “risk-free assets” are being sold off, other assets are naturally spared none.
That’s why “safe-haven assets” (silver), “tech faith” (U.S. stocks), and “speculation casinos” (crypto) all take a plunge at the same time.
A pure “liquidity black hole.”$BTC
