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Crypto Selloff Driven by US Liquidity Shortage, Analyst Says
Crypto Selloff Explained: Why US Liquidity, Not Crypto, Is Behind the Market Crash
Key Points
The recent crypto market crash is driven by a shortage of US dollar liquidity rather than any fundamental weakness in Bitcoin or blockchain technology.
Bitcoin’s price action is closely tracking SaaS stocks, revealing a broader macroeconomic issue affecting long-duration assets.
Gold’s rally has absorbed a large share of available liquidity, leaving risk assets exposed.
Temporary US government shutdowns and Treasury cash management have intensified liquidity pressure.
Despite short-term volatility, leading macro analysts remain strongly bullish on crypto heading into 2026.A Market Crash That Sparked the Wrong Narrative
Over the weekend, the cryptocurrency market experienced a sharp and sudden downturn, wiping out more than $250 billion in total market capitalization. As prices fell rapidly, a familiar narrative resurfaced across social media and trading desks: Bitcoin is broken, crypto is over, and the cycle has ended.
However, according to prominent macro investor Raoul Pal, this interpretation completely misses the real cause of the selloff. The problem, he argues, has nothing to do with crypto itself. Instead, the downturn is the result of a broader liquidity drought in the United States financial system.
This distinction matters, because when markets misdiagnose the cause of a crash, they often misprice the recovery as well.
Bitcoin and SaaS Stocks Are Telling the Same Story
One of the strongest pieces of evidence against a crypto-specific explanation is Bitcoin’s recent correlation with Software as a Service stocks. These two asset classes appear unrelated on the surface, yet they have been moving almost in perfect sync.
The reason lies in how both assets are valued. Bitcoin and SaaS stocks are considered long-duration assets, meaning their worth is largely based on future adoption, growth, and cash flows rather than immediate returns. Assets with these characteristics are extremely sensitive to liquidity conditions and interest rates.
When liquidity tightens, investors pull capital from riskier, long-duration assets first. This explains why Bitcoin and SaaS stocks have declined together, while safer assets have held up better.
In other words, the market is not saying that crypto has failed. It is saying that liquidity is scarce.
Gold’s Rally and the Liquidity Drain Effect
Another overlooked factor in the recent selloff is gold. As gold prices surged, they absorbed a significant portion of marginal liquidity that would normally flow into assets like Bitcoin or growth stocks.
When liquidity is abundant, multiple asset classes can rise together. But when liquidity becomes constrained, capital flows toward perceived safety. In this environment, gold benefited, while risk assets paid the price.
This dynamic reinforces the idea that the selloff was not triggered by bad crypto news, regulatory shocks, or technological failures. It was driven by competition for limited liquidity.
How US Government Actions Intensified the Pressure
The liquidity squeeze did not happen in isolation. Temporary US government shutdowns and structural issues within the financial system added fuel to the fire.
In previous cycles, liquidity drains caused by the US Treasury rebuilding its cash balance were partially offset by funds flowing out of the Federal Reserve’s Reverse Repo Facility. That mechanism acted as a buffer, reducing the overall impact on markets.
Today, that buffer no longer exists. The Reverse Repo Facility has effectively been drained, meaning any Treasury cash rebuilding now results in a direct and unfiltered liquidity withdrawal from the system.
As liquidity leaves, risk assets react immediately.
FAQ
Is this crypto selloff caused by problems within the crypto industry?
No. The evidence suggests that the selloff is driven by macroeconomic liquidity conditions rather than any failure in blockchain technology or crypto adoption.
Why is Bitcoin moving like tech stocks?
Bitcoin and SaaS stocks are both long-duration assets, meaning they depend heavily on future growth expectations and are highly sensitive to interest rates and liquidity changes.
What role did gold play in the downturn?
Gold absorbed a large share of available liquidity during its rally, reducing the capital available for risk assets such as crypto and growth stocks.
Are interest rates the main risk for crypto right now?
Liquidity matters more than rates alone. While rate expectations influence sentiment, actual liquidity flows have a stronger impact on asset prices.
Is the long-term outlook for crypto still positive?
Many macro analysts remain strongly bullish on crypto for the coming years, especially if liquidity conditions improve as expected.
Debunking the Fear Around the Federal Reserve Narrative
Some analysts have attributed the crypto downturn to concerns over a potentially hawkish Federal Reserve leadership, particularly fears that future rate cuts may be slower than expected.
Raoul Pal strongly rejects this explanation. He argues that the market is misunderstanding the likely policy direction. According to his view, the Federal Reserve’s approach will resemble the Greenspan-era playbook, focusing on rate cuts while allowing economic growth to run hot.
Under this framework, productivity gains driven by artificial intelligence are expected to help manage inflation, giving policymakers room to ease financial conditions without triggering instability.
If this outlook proves accurate, the current liquidity squeeze may represent a temporary phase rather than a structural shift.
Why 2026 Could Be a Breakout Year for Crypto
Despite the pain felt across crypto markets, Pal remains firmly bullish on the medium-term outlook. He believes that most of the liquidity drain is nearing its end, and that the market is gradually gaining clarity on how fiscal and monetary forces will interact over the next cycle.
When liquidity returns, long-duration assets tend to rebound aggressively. Historically, Bitcoin has been one of the biggest beneficiaries of such shifts.
Rather than signaling the end of crypto, this selloff may ultimately be remembered as the final shakeout before the next expansion phase.
Final Thoughts: Macro Forces Matter More Than Headlines
The recent crypto crash was dramatic, but drama does not equal diagnosis. When Bitcoin moves in lockstep with SaaS stocks and reacts to Treasury liquidity flows, the message is clear.
This was not a failure of crypto.
It was a reminder that macro liquidity still rules global markets.For long-term investors, understanding that difference can be the edge that separates panic from opportunity.
Whether you’re a beginner or a seasoned investor, BYDFi gives you the tools to trade with confidence — low fees, fast execution, copy trading for newcomers, and access to hundreds of digital assets in a secure, user-friendly environment.
2026-02-04 · 2 hours agoSantiment Says Crypto’s Persistent Fear Is a Bullish Indicator
Lingering Extreme Fear in Crypto Sparks Optimism: Experts See Bullish Signals
The cryptocurrency market is currently awash with fear, uncertainty, and doubt—but some analysts believe that the very sentiment scaring investors may actually be a sign of upcoming opportunities. According to crypto analytics platform Santiment, the intense negativity dominating social media discussions could be one of the strongest bullish indicators available today.
Extreme Negativity: A Silver Lining
Santiment’s latest report highlights a silver lining in the widespread pessimism among crypto enthusiasts and investors. Social media, typically a hub for speculation and hype, is currently dominated by fear-driven commentary. The Crypto Fear & Greed Index, a popular tool for measuring market sentiment, recorded an “Extreme Fear” score of 20 on Saturday—reflecting a market deeply cautious about short-term movements. This comes after hitting 16 on Friday, marking the lowest sentiment score of 2026 and the first time since December 19 that investors exhibited such strong anxiety.
According to Santiment, this kind of overwhelming negativity is historically linked to market reversals. When the majority of participants expect prices to fall further, it often sets the stage for a rebound, the report stated. In other words, extreme fear could signal that the market is nearing a turning point, with the potential for an upward shift on the horizon.
Bitcoin and Ether Under Pressure
The fear in the market is not without reason. Bitcoin (BTC) has seen a nearly 7% decline over the past week, trading around $83,950, while Ether (ETH) has dropped more than 9%, currently priced at $2,690. Bitcoin has struggled to break past the psychologically significant $100,000 level since November 13, prompting speculation that the market may have entered an extended period of consolidation—or even a bear phase.
Yet, despite these declines, analysts see opportunity in the chaos. Markets often move contrary to collective expectations, and extreme caution by investors can sometimes signal the perfect entry point for those looking to capitalize on a potential upswing.
Temporary Sentiment or Long-Term Shift?
Not all experts are convinced that the market will immediately bounce back. Crypto analyst Benjamin Cowen cautioned in a recent video that the much-discussed rotation from traditional assets like gold and silver into crypto may not materialize in the short term. He emphasized that while excitement is building, immediate returns may not match the market’s high expectations.
However, industry insiders argue that the current sentiment may be only a temporary blip. Shan Aggarwal, Chief Business Officer at Coinbase, noted that despite negative sentiment, there are clear signs of long-term growth and adoption if investors pay close attention.
Institutional Momentum Signals a Bright Future
Aggarwal points to increasing institutional interest as a key factor supporting a potential rebound. Major financial players—including MasterCard, PayPal, American Express, and JPMorgan—have been actively hiring for crypto-related roles, signaling that the industry is expanding beyond niche circles into mainstream finance.
Similarly, Bitwise CEO Huntley Horsley emphasized that despite short-term declines, the crypto sector is hurtling toward the mainstream, suggesting that today’s fear may pave the way for tomorrow’s broader adoption and market expansion.
Reading Between the Lines
For investors, understanding the emotional climate of the market can be as important as tracking prices. Extreme fear, while uncomfortable, has historically served as a contrarian indicator—alerting savvy investors to potential buying opportunities. While caution is warranted, the current market dynamics suggest that those who can navigate through fear may find themselves well-positioned for future gains.
In summary, while the crypto market is grappling with extreme negativity, experts highlight that this fear itself could be a precursor to a rebound. As the market continues to evolve, those willing to pay attention to the underlying signals, rather than the headlines, may discover opportunities hidden within the fear.
Whether you’re a beginner or a seasoned investor, BYDFi gives you the tools to trade with confidence — low fees, fast execution, copy trading for newcomers, and access to hundreds of digital assets in a secure, user-friendly environment.
2026-02-03 · 21 hours agoCoreWeave reveals how crypto infrastructure evolved into AI backbone
How Crypto-Era Infrastructure Quietly Became the Backbone of Artificial Intelligence
What once powered the world’s most energy-hungry cryptocurrency mines is now silently fueling the rapid expansion of artificial intelligence. The story of CoreWeave is not just a corporate pivot; it is a revealing snapshot of how technological infrastructure rarely disappears. Instead, it evolves, migrates, and resurfaces at the center of the next global innovation wave.
As Big Tech’s dominance over computing infrastructure begins to loosen, former crypto miners are stepping into an unexpected role: becoming the unseen architects of the AI economy.
The End of Proof-of-Work Was Not the End of GPUs
When Ethereum abandoned proof-of-work, many assumed that the massive GPU fleets built for mining would become obsolete overnight. The opposite happened. That moment triggered one of the most efficient reallocations of computing power in modern tech history.
With GPU-based mining demand collapsing, companies that had already mastered large-scale hardware deployment, power optimization, and data center management faced a simple choice: fade away or adapt. CoreWeave chose adaptation.
Rather than clinging to a declining mining model, the company began repositioning its infrastructure toward cloud computing and high-performance workloads. As artificial intelligence training exploded in complexity and scale, those same GPUs suddenly became some of the most valuable assets in the digital economy.
CoreWeave’s Quiet Pivot Into AI Infrastructure
CoreWeave’s transformation did not happen overnight, nor did it begin after the AI hype cycle captured headlines. As early as 2019, the company started moving away from pure crypto mining, laying the groundwork for a broader computing services strategy.
This early shift proved decisive. When demand for AI compute surged, CoreWeave was already prepared, armed with optimized data centers, deep GPU expertise, and a business model built around flexibility rather than speculation.
Today, CoreWeave operates as one of the largest independent GPU infrastructure providers outside the traditional cloud giants. Its rise demonstrates that the AI boom is not being built solely by Big Tech, but by a parallel ecosystem of infrastructure specialists who understand hardware at a granular level.
Nvidia’s $2 Billion Vote of Confidence
The market took notice when Nvidia agreed to a $2 billion equity investment in CoreWeave. More than a financial transaction, the deal symbolized a strategic alignment between chip manufacturing and independent infrastructure operators.
For Nvidia, supporting companies like CoreWeave ensures broader distribution channels for its GPUs beyond the tightly controlled environments of hyperscale cloud providers. For CoreWeave, the investment reinforced its credibility as a cornerstone player in the AI infrastructure race.
The partnership highlights a growing reality: AI’s future will rely on a more diversified and decentralized compute landscape.
From Mining Profits to Executive Liquidity
CoreWeave’s growth has also generated significant financial returns internally. Since its IPO in March of the previous year, company executives have reportedly realized approximately $1.6 billion in stock sale proceeds.
This liquidity event underscores how strategic reinvention can unlock value far beyond the lifespan of a single technology cycle. Crypto mining may have been the entry point, but AI infrastructure became the multiplier.
Crypto Miners Are Becoming AI Operators
CoreWeave is not alone in this transformation. Across the industry, former mining companies such as HIVE Digital, TeraWulf, Hut 8, and MARA Holdings are following a similar path.
These firms already control energy contracts, cooling systems, and high-density computing environments, making them uniquely positioned to support AI and high-performance computing workloads. What once secured Bitcoin blocks is now training neural networks and powering machine learning models.
The transition reveals an important truth: infrastructure built for decentralization can just as easily support centralized intelligence.
The New Challenges Facing AI Data Centers
Despite the profitability of AI workloads, history is beginning to repeat itself. Just as early Bitcoin miners faced resistance over power usage and environmental impact, AI data centers are now encountering local opposition tied to grid strain, land consumption, and energy allocation.
Communities hosting large AI facilities are raising questions about sustainability, echoing debates that crypto miners navigated years earlier. This convergence suggests that AI infrastructure operators may soon need to adopt the same transparency and efficiency strategies that helped crypto mining mature.
Big Tech’s Shrinking Share of Global Compute Power
Market data paints an even more disruptive picture. Research cited by Bloomberg indicates that thousands of new players are entering the data center business, gradually diluting Big Tech’s control over global computing capacity.
By 2032, major technology firms could command less than 18% of worldwide compute power. If this trend continues, the AI economy will increasingly operate on infrastructure owned by specialized, independent operators rather than a handful of corporate giants.
This fragmentation could reshape everything from pricing models to innovation speed, mirroring the decentralized ethos that once defined the crypto sector.
Where Infrastructure, AI, and Trading Worlds Intersect
As AI-driven infrastructure expands, its impact is being felt beyond data centers and cloud services. AI now plays a growing role in financial markets, crypto analytics, and automated trading strategies.
Platforms like BYDFi are already leveraging advanced computing and AI-powered tools to offer traders deeper market insights, faster execution, and more intelligent risk management. The same GPU-driven evolution that transformed mining operations is now enhancing how traders interact with digital assets.
In this sense, the legacy of crypto-era infrastructure continues to ripple outward, influencing both the backend of AI and the frontend of global trading ecosystems.
The Silent Foundation of the AI Revolution
CoreWeave’s journey reveals a larger pattern hiding in plain sight. The AI revolution did not emerge from a vacuum. It was built on the remnants of a previous technological cycle, repurposed by companies willing to adapt rather than disappear.
As artificial intelligence continues to scale, its backbone will increasingly consist of infrastructure forged during the crypto boom, refined through market pressure, and redeployed with precision.
What once powered decentralized money now fuels centralized intelligence — and the next transformation may already be underway.
2026-02-03 · a day agoUSS Status Launch: Crypto Veteran Debuts Cartoon, Privacy App, and Gasless L2
USS Status Launch: Crypto Pioneer Returns with Satirical Cartoon, Privacy App, and Gasless L2 Blockchain
The cryptocurrency world is no stranger to chaos, hype, and dramatic shifts. Yet, few projects have endured like Status, one of Ethereum’s earliest open-source platforms. After years of quietly innovating, Status has re-emerged with a bold vision—combining a satirical web cartoon, a fully unified privacy super-app, and the first-ever gasless Ethereum Layer 2 blockchain.
For crypto enthusiasts seeking innovation, privacy, and even entertainment, this is a development worth following closely.
Status: A Veteran Reawakens
Founded in 2017, Status has survived the ups and downs of the crypto market: ICO mania, regulatory shifts, exchange collapses, and countless meme coin cycles. Throughout this turbulence, the project quietly developed a comprehensive platform that integrates a crypto wallet, privacy messaging, and a web browser—allowing users to manage all aspects of their digital lives securely in one place.
Now, with the launch of USS Status, the platform is taking a bold step forward, reaffirming its mission to make privacy accessible while preserving the cypherpunk spirit that fueled the early days of cryptocurrency.
USS Status: Where Crypto Meets Comedy
In an unprecedented move, Status has launched USS Status, a satirical sci-fi animated web series. The series follows a crew of meme-inspired misfits navigating a chaotic galaxy plagued by surveillance, centralization, and bad governance.
Episode 1 features the return of a notorious crypto figure, though the team jokes that any resemblance to real events is purely coincidental. The cartoon humorously reflects the history of cryptocurrency, poking fun at projects, tokens, and personalities that will resonate with seasoned crypto users.
The series is available on X, YouTube, and TikTok, with new episodes coming soon: Watch Episode 1.
Over the past decade, crypto has traded its sense of fun and freedom for market hype and profit-first narratives, said Volodymy Hulchenko, Status App Lead. USS Status is our way of laughing at the chaos while reminding users that privacy, free speech, and digital freedom are still achievable.
The Ultimate Privacy Super-App
At the core of Status’ innovation is its unified privacy super-app, redesigned for both mobile and desktop. The app allows users to chat, transact, and browse privately in one seamless experience.
Some standout features include:
1- Anonymous profiles to protect user identities
2- A multi-chain crypto wallet with built-in swap functionality
3- End-to-end encrypted messaging
4- Censorship-resistant community spaces
5- A privacy-focused web browser
This combination positions Status as one of the most comprehensive privacy-focused crypto apps available today.
Additionally, for users exploring cryptocurrency trading and investments, the app complements platforms like BYDFi, allowing for secure and privacy-conscious interaction with decentralized exchanges and DeFi tools. BYDFi offers a simple way for both beginners and advanced traders to buy, sell, and stake digital assets, making it a natural pairing with Status for users who value privacy alongside functionality.
Status Network: A Gasless Blockchain Revolution
Status isn’t stopping at software. The project is also launching Status Network, the first Layer 2 Ethereum blockchain offering natively gasless transactions at scale.
Built on the zkEVM Linea stack, Status Network removes transaction fees using a reputation-based Karma system funded by native yield. This enables gasless private accounts, a game-changing feature for both casual users and developers seeking privacy-first blockchain solutions.
With the growing trend of Layer 2 solutions for scalability and cost reduction, Status Network could redefine how users interact with Ethereum. And for those interested in DeFi and staking, the platform has opened pre-deposit vaults .
Aligning Innovation With the Community
Unlike many projects that retain revenue internally, Status Network redistributes 100% of net revenues back to its community. This includes liquidity incentives, public funding pools, and token buy-backs. The model fosters sustainability while aligning developers, users, and investors around a shared vision.
For crypto enthusiasts, pairing the privacy-first philosophy of Status with trading and investment on BYDFi can create a secure and flexible ecosystem. Users can manage assets privately on Status while executing trades and leveraging DeFi products on BYDFi, combining privacy, security, and profitability.
Privacy, Freedom, and Fun: The New Standard
Status is proving that innovation doesn’t have to be purely technical—it can be secure, private, and entertaining at the same time. With USS Status, a privacy super-app, and the gasless L2 blockchain, the platform is breathing new life into Ethereum’s ecosystem.
Whether you are a trader, developer, or casual crypto user, this is an opportunity to explore tools that protect privacy, foster community engagement, and even bring a bit of humor into the sometimes intense world of cryptocurrency.
For those looking to trade, stake, or invest while maintaining privacy, integrating Status with BYDFi provides a seamless, secure experience, bridging the worlds of private messaging, blockchain technology, and crypto finance.
2026-02-02 · 2 days agoCrypto.Casino Launches to Improve Transparency and Trust in Crypto Casinos
Crypto.Casino Officially Launches, Setting a New Benchmark for Transparency in Crypto Gambling
As the crypto gambling industry continues to expand at a rapid pace, one major challenge remains unresolved: trust. Today, a newly launched platform called Crypto.Casino is stepping into that gap with a clear mission—to bring transparency, accountability, and confidence back into the world of crypto casinos.
Crypto.Casino has officially gone live as an independent review and feedback platform designed to help players make smarter, safer decisions before engaging with cryptocurrency-based casinos. At a time when users often struggle to separate reputable platforms from risky ones, Crypto.Casino aims to become a reliable point of reference for the global crypto gambling community.
A Growing Industry With a Trust Problem
Cryptocurrency casinos have surged in popularity thanks to fast payments, anonymity, and borderless access. However, this growth has also exposed players to inconsistent standards, unclear operating practices, and limited consumer protection. Many users are forced to rely on marketing claims rather than verified information when choosing where to play.
Crypto.Casino was created specifically to solve this problem. By offering independent evaluations and real user experiences, the platform helps players understand what they can truly expect from a casino—before depositing funds or committing time.
Trust is the most critical missing element in crypto gambling today, said Lawrence W, a representative at Crypto.Casino. Our platform exists to give players honest, unbiased insights and to reward casinos that operate fairly and transparently.
How Crypto.Casino Delivers Real Transparency
Unlike promotional review sites, Crypto.Casino positions itself as a neutral third party. Each listed crypto casino is assessed using clear criteria that focus on fairness, security standards, payment reliability, user experience, and customer support quality. These professional evaluations are combined with verified user feedback to create a well-rounded, realistic picture of each platform.
What truly sets Crypto.Casino apart is its emphasis on community participation. Players are encouraged to share their real experiences—both positive and negative—creating an environment where accountability naturally follows visibility. Casinos that treat players well gain credibility, while those that fail to meet expectations are openly exposed.
Empowering Players Through Knowledge
Beyond reviews, Crypto.Casino also focuses heavily on education. The platform publishes informative content designed to help users understand how crypto casinos work, what red flags to watch for, and how to evaluate platforms independently. This approach ensures that even newcomers to crypto gambling can navigate the space with greater confidence.
By combining education with transparency, Crypto.Casino is not just reviewing casinos—it is actively raising the overall standard of the industry.
Encouraging Higher Standards Across Crypto Casinos
One of Crypto.Casino’s long-term goals is to influence positive change across the crypto gambling sector. By highlighting best practices and exposing weak operational behavior, the platform creates incentives for casinos to improve their services, security measures, and customer treatment.
Reputable operators benefit from increased visibility and trust, while underperforming platforms are encouraged to address issues or risk losing credibility in the eyes of the community.
What’s Next for Crypto.Casino
The platform’s launch is only the beginning. Crypto.Casino plans to introduce advanced features that allow users to submit more detailed experience-based reviews and request independent audits of specific casinos. These audits will help uncover concerns related to fairness, transparency, and operational integrity, giving players an even stronger voice in shaping the industry.
With these upcoming tools, Crypto.Casino aims to become a central hub for accountability in crypto gambling—where users, not marketing budgets, determine reputation.
About Crypto.Casino
Crypto.Casino is an independent online platform dedicated to reviewing cryptocurrency-based casinos and amplifying real user feedback. Built on the principles of transparency, accountability, and consumer protection, the platform helps players make informed decisions in an industry where reliable information is often hard to find.
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2026-02-02 · 2 days ago
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