Cryptocurrency market lost $ 100 billion in just two days

The global cryptocurrency market lost about $ 100 billion in capitalization over the weekend amid the threat of a partial US government shutdown. Political tensions in Washington caused a massive sell-off in digital assets and was the main factor behind the drop.

According to TradingView, from 21:30 UTC on January 25, the market capitalization fell from $ 2.97 trillion to $ 2.87 trillion in just 6.5 hours. Bitcoin dropped by 3.4% per day, Ethereum — by 5.3%. The Gate platform reported the liquidation of crypto positions with leverage of more than $ 360 million, of which $ 324 million were long positions.

Traders on Kalshi and Polymarket estimate the probability of a government shutdown by January 31 at about 80%. On Kalshi, the figure rose from less than 10% on January 24 to 78.6% the next day. On Polymarket, it also reached 80%. The situation was exacerbated by President Donald Trump’s statements about a possible 100% tariff on imports from Canada in the event of a trade deal with China, as well as the deployment of US warships to the Middle East due to tensions with Iran.

During the previous government shutdown from October 1 to November 12 last year, Bitcoin fell from a record $ 126,080 to $ 100,000. The drop was caused by political instability and escalating trade disputes between the US and China.

The current market decline is considered to be one of the most powerful in recent years. The further dynamics of cryptocurrencies will depend on decisions in the US Senate and the development of the political situation in Washington.