On February 6, investors in dollar-denominated assets had a sleepless night.
Open the trading software, and the screen is a sea of red. Bitcoin once plummeted to $60,000, a 16% drop in 24 hours, and has fallen 50% from its previous high.
Silver plummeted 17% in a single day, like a kite with a broken string. The Nasdaq fell 1.5%, with tech stocks suffering heavy losses.
In the cryptocurrency market, 580,000 people were liquidated, and $2.6 billion vanished.
But the strangest thing is: no one knows what exactly happened?
There was no Lehman Brothers collapse, no black swan events, not even any decent bad news. US stocks, silver, and cryptocurrencies—three asset classes—all plummeted simultaneously.
When "safe-haven assets" (silver), "tech optimism" (US stocks), and "speculative casinos" (cryptocurrencies) all collapse simultaneously, the market may be sending only one message: liquidity is gone.
US Stocks: The Bubble Bursts During Earnings Season
After the market closed on February 4th, AMD delivered an impressive earnings report: both revenue and profit exceeded expectations. CEO Lisa Su said in a conference call: "We are heading into 2026 with strong momentum."
Then the stock price plummeted by 17%.
Where did things go wrong? The Q1 revenue guidance was $9.5 billion to $10.1 billion, with a midpoint of $9.8 billion. This figure exceeded Wall Street's consensus expectation ($9.37 billion), so one would expect cheers.
But the market doesn't accept it.
The most aggressive analysts, those who tout an "AI revolution" and give AMD sky-high target prices, are expecting "10 billion+". A 2% shortfall is, in their eyes, a sign of "slowing growth".
The result was a market-wide sell-off. AMD plummeted 17%, wiping out tens of billions in market value overnight; the Philadelphia Semiconductor Index plunged over 6%; Micron Technology fell over 9%, SanDisk dropped 16%, and Western Digital fell 7%.
The entire chip industry was dragged down by AMD.
AMD's wounds hadn't even healed when Alphabet dealt it another blow.
After the market closed on February 6, Google's parent company released its earnings report. Revenue and profit both exceeded expectations, with cloud business growing by 48%. CEO Sundar Pichai was beaming, stating that AI is driving growth across all of their businesses. Then, CFO Anat Ashkenazi dropped a bombshell: "By 2026, we plan to invest $175 billion to $185 billion in capital expenditures."
Wall Street was completely stunned.
This figure is double Alphabet's $91.4 billion last year and 1.5 times Wall Street's expectations of $119.5 billion. That's equivalent to burning through $500 million a day for a whole year.
Alphabet's stock price plummeted 6% in after-hours trading, then rebounded erratically before falling again, eventually barely breaking even, but panic and anxiety had already permeated the market.
This is the real AI arms race in 2026: Google will burn through $180 billion, Meta will burn through $115-135 billion, and Microsoft and Amazon are also throwing money around. The four tech giants will burn through more than $500 billion this year.
But no one knows where this arms race will end. It's like two people standing on the edge of a cliff, pushing each other; whoever stops first will be pushed off.
The growth of the tech giants in 2025 will almost entirely come from "AI expectations." Everyone is betting that although they are expensive now, AI will make these companies incredibly wealthy, so buying now is a sure thing.
However, when the market realized that "AI is not a money-printing machine, but a money-burning machine," the sky-high capital expenditures under the high valuation became a Damocles' sword hanging over their heads.
AMD is just the beginning. Every imperfect financial report that follows could trigger a new wave of panic selling.
Silver: From "Poor Man's Gold" to a Liquidity Offering
It rose 68% in one month and fell 50% in three days.
Since January, silver has followed a curve that has left everyone speechless.
It was hovering around $70 at the beginning of the month, but surged to $121 by the end of the month.
Social media was abuzz with "silver frenzy." Reddit's silver subreddit was flooded with "Diamond Hands" (referring to die-hard silver holders), and Twitter was filled with posts about "silver going to the sky," "exploding industrial demand," and "solar panels can't do without silver."
Many people genuinely believed that "this time is different." The demand for solar energy, AI data centers, and electric vehicles—these are real industrial demands, coupled with five consecutive years of supply deficits, all of which seem like the golden age of silver.
Then on January 30, silver fell by 30% in a single day.
The price plummeted from $121 to around $78. This was the most devastating single-day crash in silver trading since the Hunt brothers' incident in 1980. That year, two Texas billionaires attempted to monopolize the silver market, but were ultimately forced to liquidate their positions by the exchange, triggering a market collapse.
Forty-five years have passed, and history has repeated itself.
On February 6th, silver fell another 17%. Those who tried to "buy the dips" at $90 watched helplessly as their money evaporated once again.
Silver is a very special thing; it is both "the poor man's gold" (a safe-haven asset) and "an industrial necessity" (used in solar panels, mobile phones, and automobiles).
During a bull market, this is a double benefit: a strong economy leads to robust industrial demand; a weak economy drives up demand for safe-haven assets. Prices will rise either way.
But once a bear market begins, this becomes a double curse.
The source of the plunge can be traced back to January 30, the day Trump announced the nomination of Kevin Warsh as the new Federal Reserve Chairman. Silver prices plummeted 31.4% that day, marking the largest single-day drop since 1980.
Warsh is a well-known hawk who advocates maintaining high interest rates to control inflation. His nomination instantly cooled market concerns about "the Federal Reserve losing its independence," "monetary policy chaos," and "runaway inflation"—concerns that are precisely the core drivers behind the surge in gold and silver prices in 2025. On the day of Warsh's nomination, the dollar index rose 0.8%, and all safe-haven assets (gold, silver, and the Japanese yen) were sold off simultaneously.
Looking back at this collapse, three things happened in quick succession within 48 hours.
On January 30, the Chicago Mercantile Exchange suddenly announced that the margin requirement for silver would increase from 11% to 15%, and for gold from 6% to 8%.
At the same time, market makers began to withdraw.
Ole Hansen, head of commodity strategy at Saxo Bank, bluntly stated: "When volatility is too high, banks and brokers will exit the market to manage their own risk, but this retreat can exacerbate price volatility, triggering stop-loss orders, margin calls, and forced sell-offs."
The strangest thing is that just when silver was fluctuating the most, the London Metal Exchange (LME) trading system suddenly "experienced a technical problem," delaying the opening by one hour.
Several events occurred on almost the same day, causing silver to plummet from $120 to $78, a single-day drop of 35%, resulting in countless people being liquidated and forced out of the market.
Was it a coincidence? Or was it a carefully designed "liquidity trap"? No one knows the answer. But the silver market has been left with a deep scar ever since.
Cryptocurrency: The Delayed Funeral Finally Held
To sum up the recent cryptocurrency crash in one sentence: This is a delayed funeral.
In early February, Bitwise's Chief Investment Officer, Matt Hougan, published an article with the straightforward title "The Depths of Crypto Winter," in which he analyzed and judged that the bull market would end as early as January 2025.
In October 2025, BTC surged to a record high of $126,000, and everyone was cheering that "$100,000 is just the beginning." Hougan believes that this short-lived bull market was artificially maintained.
In 2025, Bitcoin ETFs and DAT (Digital Asset Treasury) purchased a total of 744,000 Bitcoins, worth approximately $75 billion.
To illustrate, in 2025, approximately 160,000 new Bitcoins were mined (after the halving). This means that institutions bought 4.6 times the new supply.
According to Hougan, without this $75 billion in buying, Bitcoin could have fallen by 60% by mid-2025.
The funeral was postponed for nine months, but it was eventually held.
But why did crypto suffer the most compared to other cryptocurrencies?
Within an institution's "asset list," there is an implicit ranking:
Core assets: US Treasury bonds, gold, and blue-chip stocks; these should be sold last during a crisis.
Secondary core assets: corporate bonds, large-cap stocks, and real estate; start selling when liquidity is tight.
Marginal assets: small-cap stocks, commodity futures, and cryptocurrencies were the first to be sacrificed.
In the face of a liquidity crisis, cryptocurrencies are always the first to be sacrificed.
This also stems from the inherent characteristics of cryptocurrencies. They offer the best liquidity, are traded 24/7, can be converted into cash at any time, and have the lightest moral burden and the least regulatory pressure.
Therefore, whenever an institution needs cash, whether it's to replenish margin, close out positions to stop losses, or when the boss suddenly orders to "reduce risk exposure," the first thing to be sold is always cryptocurrency.
When the US stock market and gold and silver prices reversed and entered a downward trend, cryptocurrencies were also innocently sold off, becoming fuel for margin calls.
However, Hougan also believes that the Crypto Winter has lasted a long time, and spring is definitely not far away.
The real epicenter: Japan's overlooked time bomb?
Everyone is looking for the culprit: Is it AMD's financial report? Is it Alphabet's excessive spending? Is it Trump's nomination of the Federal Reserve Chairman?
The true epicenter may have been planted as early as January 20th.
That day, the yield on Japan's 40-year government bonds broke through 4%, the first time since the maturity was introduced in 2007, and the first time in more than 30 years that the yield on any maturity of Japanese government bonds had fallen below 4%.
For decades, Japanese government bonds have served as a "safety net" for the global financial system. Interest rates have been near zero, or even negative, making them as stable as a rock.
Hedge funds, pension funds, and insurance companies worldwide are all playing a game called "yen carry trade":
Borrow Japanese yen at ultra-low interest rates in Japan, exchange it for US dollars, buy US Treasury bonds, tech stocks, or cryptocurrencies, and then profit from the interest rate differential.
As long as Japanese government bond yields remain unchanged, this game can continue indefinitely. How large is the market? Nobody knows for sure, but conservative estimates put it at least several trillion dollars.
As the yen entered a rate hike cycle, the scale of yen carry trades gradually shrank, but after January 20, this carry trade game went straight into hell mode, or even liquidation mode.
Japanese Prime Minister Sanae Takaichi announced a snap election, promising tax cuts and increased government spending. The problem is that Japan's government debt ratio is already a staggering 240% of GDP, the highest in the world. If taxes are cut again, how will the government repay the debt?
The market exploded, with Japanese government bonds being sold off frantically and yields soaring. The yield on 40-year government bonds jumped 25 basis points in a single day—a level of volatility never seen in Japan in 30 years.
When Japanese government bonds collapsed, a chain reaction began:
With the yen appreciating, funds that borrowed yen to buy US Treasury bonds, stocks, and Bitcoin suddenly found their repayment costs skyrocketing. They either had to immediately close their positions to cut their losses or face liquidation.
US Treasury bonds, European bonds, and all “long-duration assets” were sold off as investors needed cash.
Stocks, precious metals, and cryptocurrencies all suffered. When even "risk-free assets" are being dumped, no other asset class is spared.
This is why "safe-haven assets" (silver), "tech credence" (US stocks), and "speculative casinos" (cryptocurrencies) all experienced a collective plunge at the same time.
A pure "liquidity black hole".
