Crypto Market Wipes Out $390B — Largest Rout Since FTX Collapse
By John Nada·Jun 6, 2026·2 min read
Bitcoin and Ethereum plunged, slicing $390B from crypto markets. Largest decline since FTX. Macro pressures and AI investments challenge a swift recovery.
A seismic shift rattled the crypto world this week as Bitcoin and Ethereum nosedived, erasing $390 billion in market value. The market's tumble evoked memories of the FTX collapse, marking the harshest drawdown since that fateful event in late 2022.
Bitcoin tumbled 17.3%, while Ethereum plunged 22%, according to CoinDesk, setting both cryptocurrencies on a course for their steepest weekly fall since the FTX debacle. Though Saturday brought a hint of stability, with Bitcoin hovering above $60,000 and Ethereum near $1,550, the scars of the week lingered.
The rout extended beyond mere price slashes. CoinGlass reported that crypto derivatives traders experienced a significant wipeout, with $7 billion in leveraged positions liquidated, highlighting the sheer scale of the financial tempest.
But what triggered this turmoil? A confluence of bearish factors. The tremors began when Strategy (MSTR), known for its unwavering Bitcoin hoard, sold BTC for the first time in nearly four years. While the sale was a modest 32 BTC, it signaled potential liquidity needs, sparking investor concern.
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Simultaneously, Bitcoin ETFs hemorrhaged capital as investors redirected funds towards AI investments. With the likes of OpenAI and SpaceX on the horizon, the allure of burgeoning AI ventures made Bitcoin holdings less attractive, noted K33 Research's Vetle Lunde.
Adding to the pressure, a security flaw in Zcash discovered by AI researchers sent the crypto plummeting, showcasing AI's dual role as an investment darling and a technological disruptor.
The week climaxed with a stronger-than-expected U.S. jobs report, which forced a reevaluation of the Federal Reserve's stance. With inflation stubborn and rate hikes back on the table, U.S. Treasury yields surged, and the Nasdaq 100 snapped its record rally.
As traditional markets closed for the weekend, it seemed a pause had offered respite. Yet, looking forward, the interplay of macroeconomic pressures and AI-driven shifts remains a formidable challenge for crypto's recovery. The path ahead is fraught with questions—will this downturn mark a lasting bottom, or is it merely a waypoint in a continuing decline?