Stocks, precious metals, and cryptocurrencies all suffer together, creating a pure "liquidity black hole."

Written by: Uchiha Naruto, Deep Tide TechFlow

On February 6, dollar asset investors found it hard to sleep.

Opening the trading software, the screen was filled with blood red. Bitcoin once dropped to $60,000, evaporating 16% in 24 hours, and has fallen 50% from its previous peak.

Silver plummeted like a kite with a broken string, crashing 17% in a single day. The Nasdaq fell 1.5%, with tech stocks in disarray.

In the crypto 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 collapse, no black swan event, and not even any significant bad news. U.S. stocks, silver, and cryptocurrencies all collectively plunged at the same time.

When "safe-haven assets" (silver), "tech faith" (U.S. stocks), and "speculative casinos" (cryptocurrencies) all crash simultaneously, the message the market conveys may only be one: liquidity is gone.

U.S. Stocks: The Bubble Bursts During Earnings Season

After the market closed on February 4, AMD delivered a stunning earnings report: revenue and profit all exceeded expectations. CEO Lisa Su stated on the conference call: "We are entering 2026 with strong momentum."

Then the stock price plummeted 17%.

Where did the problem lie? Q1 revenue guidance was $9.5 to $10.1 billion, with a midpoint of $9.8 billion. This figure exceeded Wall Street's consensus expectation ($9.37 billion), which should have warranted cheers.

But the market did not accept it.

The most aggressive analysts, those shouting about the "AI revolution" and giving AMD sky-high target prices, were expecting "over $10 billion." A 2% miss, in their eyes, signaled "slowing growth."

The result was a stampede. AMD plummeted 17%, losing hundreds of billions in market value overnight; the Philadelphia Semiconductor Index fell over 6%; Micron Technology dropped over 9%, SanDisk fell 16%, and Western Digital dropped 7%.

The entire chip sector was dragged down by AMD alone.

Before AMD's wounds had healed, Alphabet dealt another blow.

After the market closed on February 6, Google's parent company released its earnings report. Revenue and profit again exceeded expectations, with cloud business growth of 48%. CEO Sundar Pichai was pleased: "AI is driving growth across all our businesses." Then, CFO Anat Ashkenazi threw out a number: "In 2026, we plan to invest $175 to $185 billion in capital expenditures."

Wall Street was collectively stunned.

This number is double Alphabet's last year ($91.4 billion) and 1.5 times Wall Street's expectation ($119.5 billion). It equates to burning $500 million a day for an entire year.

Alphabet's stock price plummeted 6% after hours, then jerked back and forth, ultimately barely holding steady, but panic and concern had already spread through the market.

This is the real AI arms race of 2026: Google burning $180 billion, Meta burning $115 to $135 billion, and Microsoft and Amazon also throwing money around. The four tech giants are set to burn over $500 billion this year.

But no one knows where the endpoint of this arms race lies. It's like two people standing at the edge of a cliff, shoving each other; whoever stops first will be pushed off.

The gains of the seven tech giants in 2025 almost entirely came from "AI expectations." Everyone is betting: although it's expensive now, AI will make these companies incredibly profitable, so buying now won't be a loss.

However, when the market realizes that "AI is not a money printer, but a money burner," the exorbitant capital expenditures under high valuations become the sword of Damocles hanging overhead.

AMD is just the beginning. From now on, every less-than-perfect earnings report could trigger a new round of stampedes.

Silver: From "Poor Man's Gold" to Liquidity Sacrifice

A 68% increase in a month, followed by a 50% drop in three days.

Since January, silver has followed a curve that has left everyone dumbfounded.

At the beginning of the month, it hovered around $70, and by the end of the month, it surged to $121.

Social media once ignited a "silver frenzy." Reddit's silver section was filled with "Diamond Hands" (referring to steadfast holders), and Twitter was rife with posts like "Silver is going to the moon," "Industrial demand is exploding," and "Solar panels can't do without silver."

Many truly believed "this time is different." With real industrial demand from solar energy, AI data centers, and electric vehicles, combined with five consecutive years of supply deficits, it seemed like the golden age for silver.

Then on January 30, silver dropped 30% in one day.

From $121, it crashed directly to around $78. This was the most brutal single-day collapse of silver since the "Hunt Brothers incident" in 1980. That year, two Texas tycoons attempted to corner the silver market, only to be forcibly liquidated by the exchange, leading to a market crash.

Forty-five years later, history repeats itself.

On February 6, silver fell another 17%. Those who "bottom-fished" at $90 watched helplessly as their money evaporated once again.

Silver is unique; it is both "poor man's gold" (a safe-haven asset) and an "industrial necessity" (used in solar panels, phones, and cars).

In a bull market, this is a double benefit: a strong economy boosts industrial demand; a weak economy increases safe-haven demand. It can rise in any scenario.

But once it enters a bear market, it becomes a double curse.

The source of the crash can be traced back to January 30, when Trump announced the nomination of Kevin Warsh as the new Federal Reserve Chair, causing silver to plummet 31.4% that day, marking the largest single-day drop since 1980.

Warsh is a well-known hawk, advocating for maintaining high interest rates to control inflation. His nomination meant that market concerns about "the Fed losing independence," "monetary policy chaos," and "out-of-control inflation" instantly cooled, and these concerns were precisely the core drivers behind the surge in gold and silver in 2025. On the day of Warsh's nomination, the dollar index rose 0.8%, and all safe-haven assets (gold, silver, yen) were simultaneously sold off.

Looking back at this crash, three things happened in quick succession within 48 hours.

On January 30, the Chicago Mercantile Exchange suddenly announced: silver margins would rise from 11% to 15%, and gold from 6% to 8%.

At the same time, market makers began to withdraw.

Saxo Bank's commodity strategy chief Ole Hansen stated bluntly: "When volatility is too high, banks and brokers will exit the market to manage their risks, and this retreat will actually exacerbate price volatility, triggering stop-loss orders, margin calls, and forced liquidations."

The strangest thing is that just when silver was experiencing the most intense volatility, the London Metal Exchange (LME) suddenly had a "technical issue" with its trading system, delaying the opening by an hour.

Several events coincided on almost the same day, causing silver to drop from $120 to $78, with a single-day drop of 35%, leading countless people to be liquidated.

Was it a coincidence? Or was it a carefully designed "liquidity trap"? No one knows the answer. But the silver market has since been left with a deep scar.

Cryptocurrency: The Delayed Funeral Finally Takes Place

In summary, the recent continuous decline in cryptocurrency can be described as: this is a delayed funeral.

At the beginning of February, Bitwise Chief Investment Officer Matt Hougan published an article titled straightforwardly "The Depths of Crypto Winter," in which he analyzed and concluded that the bull market ended as early as January 2025.

In October 2025, BTC surged to a historic high of $126,000, with everyone cheering that "the $100,000 mark is just the beginning." Hougan believes this brief bull market was artificially maintained.

Throughout 2025, Bitcoin ETFs and DAT companies (Digital Asset Treasury companies) bought a total of 744,000 bitcoins, worth about $75 billion.

To compare, in 2025, the new mining output of Bitcoin was about 160,000 coins (after the halving). This means institutions bought 4.6 times the new supply.

In Hougan's view, without this $75 billion buying pressure, Bitcoin could have dropped 60% by mid-2025.

The funeral was delayed for nine months, but it was bound to happen.

But why, comparatively, did cryptocurrencies suffer the most?

In the "asset lists" of institutions, there is an invisible ranking:

Core assets: U.S. Treasuries, gold, blue-chip stocks, sold last in a crisis.

Secondary core assets: corporate bonds, large-cap stocks, real estate, sold when liquidity tightens.

Marginal assets: small-cap stocks, commodity futures, cryptocurrencies, sacrificed first.

In the face of a liquidity crisis, cryptocurrencies are always the first to be sacrificed.

This also stems from the nature of cryptocurrencies themselves. They have the best liquidity, trading 24/7, can be liquidated at any time, and carry the lightest moral burden with the least regulatory pressure.

Thus, whenever institutions need cash, whether to meet margin calls, close positions, or when the boss suddenly orders to "reduce risk exposure," the first to be sold is always cryptocurrency.

When U.S. stocks and gold and silver prices reverse and enter a downward trend, cryptocurrencies are also innocently sold off, becoming fuel for margin calls.

However, Hougan also believes that the crypto winter has lasted long enough, 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 earnings report? Is it Alphabet's spending? Is it Trump's nomination of the Fed Chair?

The real epicenter may have been buried as early as January 20.

On that day, Japan's 40-year government bond yield broke 4%, the first time since the introduction of that term in 2007, and the first time any Japanese government bond yield has broken 4% in over 30 years.

For decades, Japanese government bonds have been the "safety cushion" of the global financial system. With interest rates close to zero, or even negative, they have been as stable as a rock.

Global hedge funds, pension funds, and insurance companies have been playing a game called "yen carry trade":

Borrowing yen at ultra-low interest rates in Japan, converting it to dollars, buying U.S. Treasuries, tech stocks, or cryptocurrencies, and then profiting from the interest rate differential.

As long as Japanese government bond yields remain stable, this game can continue indefinitely. How large is the market? No one can say for sure, but conservative estimates put it at least in the tens of trillions of dollars.

As Japan enters a rate hike cycle, the scale of yen carry trades gradually shrinks, but after January 20, this carry trade game directly entered hell mode, even liquidation mode.

Japanese Prime Minister Fumio Kishida announced early elections, promising tax cuts and increased fiscal spending, but the problem is that Japan's government debt ratio has already reached 240% of GDP, the highest in the world. If they cut taxes, how will they repay the debt?

The market exploded, and Japanese government bonds were sold off wildly, causing yields to soar. The 40-year government bond yield rose 25 basis points in one day, a level of volatility not seen in Japan for 30 years.

When Japanese government bonds collapsed, the chain reaction began:

The yen appreciated, and those funds that borrowed yen to buy U.S. Treasuries, stocks, and Bitcoin suddenly found their repayment costs skyrocketing. They either had to close positions immediately to stop losses or face liquidation.

U.S. Treasuries, European bonds, and all "long-duration assets" were sold off in tandem because investors needed cash.

Stocks, precious metals, and cryptocurrencies all suffered. When even "risk-free assets" are being sold off, no other assets can escape unscathed.

This is why "safe-haven assets" (silver), "tech faith" (U.S. stocks), and "speculative casinos" (cryptocurrencies) all plunged at the same time.

A pure "liquidity black hole."

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