## Why Bitcoin Is Crashing Again

Bitcoin has experienced another significant crash recently, marking a pattern that has repeated at least half a dozen times. Often, these downturns are framed as a battle between **believers** who see Bitcoin as destiny and **skeptics** who dismiss it as a fad or worse. As one asset manager told *Bloomberg* during the price drop, "The market is currently navigating a 'crisis of faith.'"

But a closer look reveals that Bitcoin's crash mirrors those in traditional markets, with a key driver being **debt**—and lots of it. In fact, Bitcoin's debt problem is even more pronounced, a point on which both bulls and bears agree.

### The Numbers Tell the Story

Bitcoin reached a total value exceeding **$2 trillion in 2025**, with prices soaring above **$120,000**. However, it has since plummeted to just over half that value. One particularly disastrous week between late January and early February saw Bitcoin lose **a quarter of its value**, highlighting the severity of the downturn.

This crash underscores how borrowed money can trigger a cascade of losses, similar to mechanisms in traditional finance. The reliance on debt in Bitcoin trading amplifies volatility and risk, making it a critical factor for investors to monitor.

Just as in traditional markets, borrowed money set off a cascade of losses.

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