Crypto Sheds $390B in Week, Worst Since FTX; Bitcoin -17%, Ether -22%

Crypto markets logged their steepest weekly selloff since the November 2022 FTX collapse, erasing about $390 billion in value as bitcoin and ether posted their biggest weekly declines in nearly two years. Bitcoin slid roughly 17.3% over the week, briefly dipping into the low-$60,000 range, while ether fell about 22% and touched around $1,550 before a modest stabilization over the weekend. By the numbers - Bitcoin: ~-17.3% on the week (near $60,000) - Ether: ~-22% on the week (around $1,550) - Market cap: about $390 billion wiped out in seven days; total crypto market capitalization now just above $2 trillion, down from an October peak near $4.2 trillion - Derivatives: roughly $7 billion in leveraged positions liquidated, including about $5.7 billion in long liquidations (CoinGlass); the most intense liquidation waves hit Monday and Friday Drivers behind the slide - MicroStrategy's first bitcoin sale in almost four years: the company sold 32 BTC (about $2.5 million). The size was small, but it rattled investors who view the firm as a consistent source of demand and raised questions about whether additional sales could be used to meet obligations tied to its preferred equity stack. - Continued bitcoin ETF outflows: K33 Research said some redemptions may reflect capital rotating out of crypto and into artificial intelligence-linked equities, which have surged this year. - Rising opportunity cost from AI momentum and IPO speculation: strong gains in AI stocks and renewed chatter about high-profile IPOs, including names such as OpenAI and Anthropic, have drawn attention and capital away from crypto for some investors. - AI-driven security shock: Zcash (ZEC), a standout earlier this year, dropped more than 40% after researchers used Anthropic's latest AI model to surface a critical vulnerability in its privacy system, underscoring how AI can amplify security risks. - Macro pressure after a strong U.S. jobs report: Friday's upside surprise forced a rethink of Federal Reserve expectations. With rate cuts less certain, concerns about persistent inflation and even further hikes resurfaced. U.S. Treasury yields jumped, and the Nasdaq 100 posted its worst session since the tariff-driven selloff in April 2025, snapping a record-setting rally that had supported risk assets. What to watch next Weekend trading was calmer with markets closed, but sentiment remains fragile. Whether the move marks capitulation ahead of a bottom or sets up another leg lower is likely to depend on bond yields, the Fed's policy path, and whether crypto can compete for investor attention against booming AI stocks and potential tech IPOs. Near-term risks include continued volatility and elevated liquidation pressure. Longer-term watchpoints include ETF flow trends, any follow-on actions from MicroStrategy, U.S. inflation and rate guidance, and additional AI-assisted security findings that could hit confidence in specific projects.