CoinSignals

Economist Nouriel Roubini has issued a fresh warning about what he calls an approaching crypto apocalypse, arguing that Bitcoin behaves more like a leveraged speculative bet than a safe haven. According to him, it tends to rise and fall with high risk equities instead of protecting investors during periods of uncertainty.

Roubini, a long time critic of digital assets, said the future of money and payments will change slowly through incremental innovation rather than the dramatic overhaul promised by crypto supporters. In a recent statement, he pointed to the latest price drop in Bitcoin and other cryptocurrencies as proof of the extreme volatility of what he describes as a pseudo asset class, adding that regulators should take notice before the damage deepens.

He reflected on events from a year earlier, when Donald Trump returned to the US presidency after actively appealing to retail crypto investors and receiving strong backing from figures within the crypto industry. At the time, many proponents claimed Bitcoin would surge to at least 200,000 dollars by the end of 2025 and establish itself as digital gold.

Roubini Says Bitcoin Fails as a Hedge

Roubini argued that Trump followed through on pro crypto promises by rolling back much of the existing regulatory framework. He cited actions such as signing the Guiding and Establishing National Innovation for US Stable Coins Act, promoting the Digital Asset Market Clarity Act, benefiting from crypto related business deals, endorsing a meme coin using his name, granting pardons to convicted crypto criminals, and hosting exclusive White House events for industry insiders.

He noted that crypto was also expected to thrive amid rising macroeconomic and geopolitical risks, including expanding public debt, weakening fiat currencies, trade disputes, and heightened tensions involving the United States, Iran, and China. These conditions helped gold climb more than sixty percent in 2025.

Bitcoin, by contrast, declined six percent that year and was down forty two percent from its October high at the time of writing. It was also trading below its level at the time of Trump’s election, while the TRUMP and MELANIA meme coins had lost around ninety five percent of their value. Roubini highlighted that Bitcoin has repeatedly fallen during periods when gold rallied, reinforcing his view that it acts like a leveraged risk asset closely tied to speculative stocks rather than a hedge.

He repeated his long held position that crypto does not qualify as a currency, arguing that it fails to function as a unit of account, a scalable payment method, or a reliable store of value. He referenced El Salvador as an example, noting that Bitcoin accounts for less than five percent of transactions there. He also maintained that crypto is not a true asset since it does not generate income or provide meaningful real world utility.

Views on Stablecoins and Regulation

Roubini said that after seventeen years, the only crypto application with meaningful adoption is the stablecoin. He described it as a digital version of fiat money that traditional finance has already replicated, adding that most blockchain systems are centralized, permissioned, and privately controlled. In his view, fully decentralized finance will never scale because governments will not allow anonymous transactions, and compliance rules such as AML and KYC eliminate claims of lower costs.

On regulation, Roubini warned that the GENIUS Act could recreate the instability seen in nineteenth century free banking. He argued that stablecoins lack proper banking safeguards, including access to lenders of last resort and deposit insurance, making them vulnerable to runs. He also criticized proposals that would allow stablecoins to pay interest, saying this could destabilize fractional reserve banking unless payment systems and credit creation are clearly separated.

These remarks come as Bitcoin continues to weaken, falling another six percent on Thursday and trading below 71,600 dollars at the time of writing. The ongoing decline has added to broader market anxiety, with analysts cautioning that prolonged weakness could create serious balance sheet stress for companies holding large Bitcoin reserves and potentially introduce wider systemic risks.

Bitcoin’s downward trend has continued over the past several days, reaching fresh multi month lows. The latest drop pushed the price to well below $67,000, showing little sign of relief for the market leader.

Bitcoin was last seen at these levels in early November, around the time of the US presidential election that led to Donald Trump being referred to as a crypto friendly president.

The past few weeks have been especially punishing for Bitcoin. Just eight days ago, it was testing the $90,000 level, but a strong rejection there triggered a sharp reversal that spread across the broader crypto market.

Following that setback, Bitcoin fell to $81,000 last Thursday and then slipped below $75,000 over the weekend as selling pressure intensified. The decline accelerated again in recent hours, with BTC dropping to around $66,900 at the time of writing. In just over a week, Bitcoin has lost more than $20,000 in value.

Altcoins have suffered alongside Bitcoin. Ethereum extended its steep decline with another nine percent drop in the past twenty four hours, falling below $2,000 for the first time since April. BNB declined by around ten percent to near $660, while XRP plunged roughly fifteen percent over the same period to about $1.32.

Heavy losses were also recorded across other tokens. ZEC dropped close to nineteen percent, MORPHO and NEXO fell by about fourteen percent each, XMR and LEO declined twelve percent, and SUI slid eleven percent, among many others. As a result, traders using high leverage were hit particularly hard.

Data from CoinGlass shows that liquidations over the past twenty four hours have climbed beyond $1.3 billion. In the last hour alone, forced closures reached roughly $350 million. Nearly 300,000 traders were liquidated during the day, with the largest single position occurring on Aster and valued at more than $11 million.

XRP is leading losses among the top 100 altcoins today after plunging roughly 13% and falling below the $1.40 level. ZEC and MORPHO are also among the worst performers, reflecting growing selling pressure across the altcoin market.

Bitcoin’s decline has continued with force, as the asset slipped under $70,000 earlier today, erasing all gains recorded after Donald Trump’s reelection in late 2024. Just over a week ago, BTC was trading near $90,000, but a sharp rejection at that level marked the start of a strong bearish move. The price first fell to $81,000, briefly rebounded to $84,000, then slid under $75,000 before another failed recovery attempt near $79,000. Bears regained control and pushed BTC down to $73,000 earlier this week, followed by another drop below $70,000.

Bitcoin has since recovered slightly above $70,000 but remains down about 7% on the day and nearly 20% on the week. Its market capitalization has declined to around $1.41 trillion, while dominance over altcoins hovers near 57%.

Altcoins continue to suffer heavy losses. Ethereum is down around 6%, BNB has fallen below $700, and XRP has reached its lowest price in more than a year. SOL, ADA, DOGE, XMR, LINK, and others remain deep in the red, while HYPE stands out as one of the few gainers, up nearly 5%. The total crypto market capitalization has dropped by another $170 billion and is now below $2.5 trillion.

Bitcoin has fallen below the $71,000 mark, yet one analyst believes the asset is trading roughly 41% under its long term fair value.

The price drop has wiped out all gains recorded since the U.S. presidential election in late 2024. Despite this decline, market analyst David argues that Bitcoin remains significantly undervalued when measured against its historical trend.

Market Stress Highlights a Widening Valuation Gap

Using a power law valuation model, David estimates Bitcoin’s fair value at $122,762, while spot prices hovered near $72,000 at the time of analysis. This creates a valuation gap of about $51,000, or 41%, which he notes is well below Bitcoin’s typical historical range.

Rather than pointing to macroeconomic headlines, David focused on market mechanics. He suggested that recent price weakness is largely driven by forced activity in derivatives markets, including hedging and liquidation pressure, instead of selling by long term holders.

One indicator supporting this view is Bitcoin’s z score, which measures how far price deviates from its long term trend. David estimated the z score at minus 0.76, signaling that Bitcoin has moved significantly below its normal deviation range.

Positioning data further supports this assessment. Over the past 30 days, Bitcoin’s price has dropped about 20%, while open interest has increased by nearly 7%, based on figures cited in the analysis.

According to David, this divergence shows that leveraged exposure is growing even as prices decline. He described it as a scenario where price weakness coincides with rising leverage, a combination that often leads to sharp and forced moves in either direction.

He also highlighted heightened volatility, noting that 20 day implied volatility exceeded 43%, alongside combined futures and options open interest above $2.3 billion. Under these conditions, David estimated a 70% chance of a short squeeze if prices begin to move higher, warning that market positioning could shift rapidly.

In addition, he identified the $73,000 level as a key gamma zone, where moves below this area could intensify volatility, while moves above it may help stabilize price action.

Leverage Driven Price Action Comes Into Focus

At the time of writing, Bitcoin was trading near $70,500, according to CoinGecko. This represents an almost 8% decline over the past 24 hours and nearly a 20% drop over the last seven days. Over the past month, Bitcoin has fallen close to 25%, leaving it about 44% below its all time high from October last year.

The downturn has triggered widespread liquidations. Data from CoinGlass shows that more than 154,000 traders were liquidated within 24 hours, with total losses approaching $718 million.

Strategy has also been impacted by the recent pullback. The firm recently acquired 855 BTC for $75.3 million, but according to the Kobeissi Letter, its Bitcoin holdings have moved further into the red, with paper losses reaching $40 billion over the past four months.

Bitcoin’s decline into a bear market is progressing faster and deeper than in the previous cycle, according to on-chain analytics platform CryptoQuant. Since falling below its 365-day moving average in November, BTC has dropped 23 percent in just 83 days, compared to a 6 percent decline over the same period in early 2022. CryptoQuant noted that momentum is deteriorating faster this cycle.

The cryptocurrency peaked at $126,000 in early October, but following the October 10 liquidation event, key indicators turned bearish. Bitcoin has since fallen to $71,000, lost major support levels, and may be targeting $70,000 to $60,000. The coin has also been rejected three times at the “Traders’ On-chain Realized Price” and recently dipped below its lower band, previously a bull market support.

Sentiment in the market has turned extremely negative, with both Bitcoin and Ethereum facing heavy pessimism, according to Santiment. Glassnode reported that BTC’s bear market continues as profitability resets, realized losses increase, spot demand remains weak, and leverage unwinds. The crypto Fear and Greed Index has plummeted to record lows around 12, signaling widespread panic.

The broader crypto market is also under pressure. Total market capitalization fell 4.4 percent to $2.53 trillion, its lowest since April 2025. Bitcoin slipped below $71,000 during early trading in Asia and is heading toward support near $65,000. Ethereum has dropped below $2,100 and is on a path to previous cycle lows. Most altcoins are performing even worse, down roughly 80 percent from their peaks.

Ethereum co-founder Vitalik Buterin has argued that the original vision of Layer 2 scaling within the Ethereum ecosystem is no longer being fulfilled. He believes that many L2 networks have failed to live up to expectations, while the Ethereum mainnet itself continues to scale directly.

Slow Progress and Low Fees

In a recent post on X, Buterin highlighted two key trends reshaping the discussion. First, L2 networks have struggled to achieve advanced decentralization and interoperability. Second, Ethereum’s mainnet now has very low fees, with gas limits expected to rise significantly through 2026.

Buterin emphasized that true Ethereum scaling was meant to expand block space while fully inheriting Ethereum’s security, meaning that all activity remains valid and censorship-resistant. Systems relying on multisig bridges or discretionary control cannot be considered genuine Ethereum extensions, even if they provide high throughput.

He noted that some L2 projects may never progress beyond an initial stage, citing technical limitations with zero-knowledge EVM safety and regulatory or customer requirements that demand ultimate control. While appropriate for those projects’ purposes, this disqualifies them from being considered Ethereum scaling in the original sense.

A Spectrum of L2s

Rather than treating all L2s as a single category, Buterin suggested viewing them as a spectrum of systems with varying degrees of Ethereum security. Some L2s may be fully secured by Ethereum, while others operate with more limited guarantees. This approach allows users and applications to select networks based on their specific needs.

He added that L2s should aim to provide unique value beyond general scaling, including specialized virtual machines, application-specific efficiency, high throughput, low-latency sequencing, or integrated services like oracles or dispute resolution. For networks handling ETH or Ethereum-based assets, reaching at least stage 1 should be a baseline requirement.

ZK-EVM Precompile

Buterin also stressed the importance of a native rollup precompile that can verify ZK-EVM proofs directly on Ethereum. This would enable trustless interoperability and composability while allowing L2s flexibility to extend functionality. He noted that while some systems in a permissionless ecosystem will operate with weaker guarantees, Ethereum’s role is to make security guarantees clear and continue strengthening the base protocol.

Tether has reportedly reduced its planned fundraising target after facing resistance from investors. According to a Financial Times report on February 4, the stablecoin issuer is now considering raising about $5 billion, down from the $15 to $20 billion initially discussed in 2025.

The earlier range was linked to a $500 billion valuation, which would have made Tether one of the world’s most valuable private companies. Several investors questioned whether this figure reflected realistic growth expectations. CEO Paolo Ardoino emphasized that the higher amount was never a firm goal and that the company, which remains profitable, does not urgently need external capital.

Tether issues USDT, the world’s largest dollar-pegged stablecoin, with approximately $185 billion in circulation. Last year, the company earned around $10 billion in profit, primarily from returns on reserves held in U.S. Treasuries. Despite strong earnings, some investors remain cautious about the valuation and fundraising plans.

The company has also diversified its reserves, holding large positions in Bitcoin and gold. In the fourth quarter of 2025, Tether purchased roughly $779 million in Bitcoin, raising total holdings to over 96,000 BTC. Transparency concerns persist, as S&P Global Ratings gave USDT its lowest score on the stablecoin stability scale last November, citing disclosure gaps and significant exposure to Bitcoin, gold, and secured loans. Ardoino criticized the rating methodology, stating it fails to capture Tether’s business model.

The lowered fundraising target shows Tether is adjusting to investor feedback. Whether the company moves forward with a smaller raise or pauses fundraising entirely will depend on investor appetite and broader crypto market conditions in the coming months.

Changpeng “CZ” Zhao, founder of Binance, has revealed a long-standing fake account that used AI-generated images to pose as a supporter while spreading false information about Binance and BNB. The account, called “Wei 威 BNB,” had 863,000 followers and appeared legitimate by using images from a BNB Chain event.

CZ noticed posts claiming the closure of a Binance account due to alleged manipulation. On closer examination, he found several altered images, including one showing him in a shirt he does not own and another combining low-resolution images of him and Binance executive Yi He with the account holder’s image. The account’s history suggested it was either hacked or purchased, originally posting female-focused content before switching to crypto in 2015.

CZ criticized the campaign as poorly executed and likely coordinated by a competitor more focused on Binance than their own business. Influencer ShirleyXBT pointed out that the account used an AI-generated version of her photo as its profile picture.

The revelation drew community support. World of Dypians CEO Teki thanked CZ for clarifying the situation, noting the posts initially seemed credible. Commentator Vegas categorized such attacks as opportunistic engagement attempts, frustrated traders, or organized FUD campaigns. He also mentioned being offered payment to spread negative sentiment about Binance, suggesting possible coordination by competitors or large market players.

The exposure comes amid ongoing scrutiny of CZ and Binance. On January 28, CZ faced criticism for advocating a buy-and-hold approach, which he clarified was personal advice and not applicable to all tokens. On January 30, Binance announced it would convert $1 billion from its SAFU insurance fund back into Bitcoin, a move some viewed as bullish but which drew attention to the exchange’s financial strategy.

Despite controversies, Binance remains a market leader. Data from CryptoQuant at the start of 2025 showed Binance accounted for 41 percent of spot trading volume and 42 percent of Bitcoin perpetual futures volume among top-tier exchanges.

Despite a bearish digital asset market, Ark Invest, led by Cathie Wood, has been increasing its exposure to crypto-related stocks over the past few trading days. The investment firm acquired thousands of shares tied to several crypto companies, taking advantage of lower prices.

According to Ark Invest’s February 3 trade filings, the firm spent over $19 million on crypto-linked stocks through its ETFs. Purchases included shares of Circle, Coinbase, Bullish, Bitmine, Block Inc., and Robinhood. On Tuesday alone, Ark Invest bought 145,488 Bitmine shares for $3.25 million, 125,218 Bullish shares for $3.46 million, 42,878 Circle shares for $2.4 million, 3,510 Coinbase shares for $630,606, 31,202 Block Inc. shares for $1.77 million, and 89,677 Robinhood shares for $7.8 million.

These purchases followed a larger round of acquisitions on Monday, when Ark Invest bought over $71 million in crypto-related shares through ETFs including the ARK Blockchain & Fintech Innovation ETF and the ARK Innovation ETF.

The broader crypto market has been struggling, with Bitcoin trading at around $76,000, down 17 percent over the past month and 14 percent in the past week. Most crypto-related stocks have posted double-digit losses over the last three months. Despite these declines, Ark Invest has continued buying, suggesting the firm sees the current market slump as an opportunity to expand its crypto holdings.

A leaked dataset of 149 million stolen credentials has surfaced this week, reportedly including login details for around 420,000 Binance accounts. The discovery underscores a growing trend of crypto theft through long-term malware infections that steal user data directly from devices, often before any funds are moved.

The Scope of the Threat

Security firm Web3 Antivirus reported on February 4 that the dataset was compiled from information-stealing malware installed on victims’ devices. The stolen data includes exchange logins, passwords, private keys, API keys, and browser session tokens for email, social media, and financial accounts. These “infostealers” can later be used for account takeovers and fund theft, highlighting the need for early device-level detection.

Web3 Antivirus also warned that malicious AI skills on platforms like ClawHub are being used to install malware disguised as wallet tools or trading bots. These tools can remain dormant until a user’s crypto balance grows or specific actions are taken, creating upstream supply-chain risks from wallets to trusted tools.

Challenges for Users and Platforms

Crypto theft continues to cause massive losses. PeckShield reported that scams and hacks drained over $4.04 billion in 2025, with scams alone increasing 64% year over year. Centralized exchanges and large organizations were targeted most, accounting for 75% of stolen funds.

Web3 Antivirus estimated total illicit crypto activity in 2025 at $158 billion, up from $64 billion in 2024. The firm noted that even low-success attacks can cause massive losses at scale, and that the real opportunity to prevent theft lies with platforms, which can monitor transaction approvals and behavior before users act.

Wallet drainers are a particularly common attack vector. Web3 Antivirus recorded 15,530 suspicious approvals across 11,908 wallets in January, leading to $4.25 million in losses. These attacks typically exploit malicious transaction approvals, emphasizing the importance of detection before signatures are confirmed.