Bitcoin Plunge Halts As Congress Ends Shutdown

The cryptocurrency market, already battered by a series of dramatic downturns since late 2024, found itself in yet another tailspin on February 3, 2026. Bitcoin, the world’s largest and most-watched digital asset, crashed below $73,000—its lowest level since early November 2024—before staging a modest recovery as political news from Washington rippled through financial markets. The day’s chaos was fueled by a perfect storm: a partial U.S. government shutdown, mounting pressure on crypto investors, and a wave of liquidations that left more than 160,000 traders reeling.

According to CoinGlass, an onchain analytics platform cited by The Street, over $660 million in crypto positions were liquidated in the 24 hours leading up to February 3. Of that staggering sum, $526.5 million were long positions—bets that prices would rise—while $135 million were shorts. Bitcoin itself led the rout, with $112.7 million in liquidations, followed closely by Ethereum at $96.5 million. In a single jaw-dropping transaction, an ETH/USDT liquidation order worth $6 million on Binance became the largest of the day, underscoring the scale and speed of the carnage.

“2026 has brought the crypto market to its knees, which was already under pressure since the flash crash on Oct. 10 last year,” The Street reported, setting the tone for a year that has so far offered little respite for digital asset enthusiasts. The latest crash, it seems, was only partially checked by a sudden shift in the political winds.

On the same day, the U.S. House of Representatives narrowly passed a funding package in a 217-214 vote, effectively ending the partial government shutdown that had sent jitters through global markets. As reported by The Block, the package will reopen most major departments as soon as President Donald Trump signs the bills into law, although funding for the Department of Homeland Security remains unresolved and will be the subject of further negotiation over the coming week and a half.

The mere prospect of a functioning government was enough to halt the panic-driven plunge in crypto prices—at least temporarily. Bitcoin bounced back to $74,674.14 by the end of February 3, still down 4.5% for the day, but off its session lows. Ether and other major cryptocurrencies followed suit, while U.S. stock indices also clawed back some of their losses: the Nasdaq closed down 2% and the S&P 500 finished 1.3% lower, both having rebounded from their worst levels earlier in the day.

Yet for many investors, the damage had already been done. According to The Street, a total of 161,033 traders were liquidated in the 24-hour span, many of whom had bet on a swift recovery or further declines, only to be caught in the market’s violent whipsaw. The magnitude of the liquidations—and the speed at which they occurred—served as a stark reminder of the volatility and risk inherent in cryptocurrency trading.

One of the most closely watched players in this drama was MicroStrategy, now rebranded as Strategy, a company that has become synonymous with large-scale Bitcoin accumulation. Co-founded by Michael Saylor in 1989 as a software enterprise, the company made headlines in 2020 when it pivoted to become a digital asset treasury (DAT), amassing Bitcoin on its balance sheet in a bet that the cryptocurrency would serve as a superior store of value compared to cash.

As of early 2026, Strategy holds a staggering 713,502 Bitcoin, according to the latest disclosures. But with the average acquisition cost for these holdings at $76,052 per Bitcoin, the company found itself underwater as the cryptocurrency’s price tumbled to $72,897.14 on February 3. The company’s stock reflected this pain, trading at $129.03—down 7% in the past 24 hours and at its lowest point since September 2024.

Strategy’s unique approach has long intrigued investors. In the heady days when Bitcoin set new record highs, the company’s market Net Asset Value (mNAV)—a metric comparing enterprise value to the value of its Bitcoin holdings—often stayed well above 1, meaning its shares traded at a premium to the underlying crypto assets. “Traders got attracted to Strategy’s premium, as it seemed more profitable to buy MSTR shares than purchasing Bitcoin directly,” The Street noted. But as the crypto market soured, that premium evaporated, and the mNAV began hovering near 1, raising questions about the viability of DATs as a business model.

This shift caught the attention of institutional players. Morgan Stanley Capital International (MSCI), a major index provider, began contemplating whether companies with more than 50% of their balance sheets dedicated to crypto assets should remain in its indices. Michael Saylor, never one to shy away from a fight, described MSCI’s proposal as “discriminatory, arbitrary, and unworkable.” In a temporary reprieve for Strategy and similar firms, MSCI announced on January 6 that it would delay the proposal, pending further research and consultation, but maintained its 50% threshold for crypto allocation.

Despite the turmoil, Strategy faces no immediate risk of forced selling. None of its Bitcoin holdings are pledged as collateral, meaning the company is insulated—at least for now—from margin calls or liquidation spirals. However, as The Street pointed out, a continued slump in Bitcoin’s price could slow down its future acquisitions, potentially altering its long-term strategy. The company is expected to report its fourth-quarter 2025 financial results after the market closes on February 5, a moment that investors and critics alike will be watching closely.

Popular television personality and CNBC host Jim Cramer has not missed the opportunity to take a dig at Saylor ahead of the earnings release, but the Strategy co-founder remains steadfast in his commitment to Bitcoin. “Strategy co-founder, however, remains defiant in his chase of Bitcoin,” The Street summarized, capturing the high-stakes bravado that has come to define both Saylor and his company’s relationship with the digital asset.

For the broader crypto market, the events of February 3, 2026, serve as both a cautionary tale and a case study in resilience. The market’s reaction to political developments in Washington underscores just how interconnected global finance has become, with digital assets now responding to the same currents as stocks, bonds, and traditional currencies. Yet the volatility, the risk, and the potential for sudden reversals remain uniquely crypto.

As the dust settles, traders and investors are left to ponder what comes next. Will Bitcoin regain its footing and lift the market with it, or is this the start of a deeper correction? For now, all eyes are on Washington, Wall Street, and the ever-unpredictable world of digital assets—where fortunes can change in a heartbeat, and the only certainty is uncertainty itself.