The crypto market saw a sudden drop that left many traders uneasy. Within a single day, about $1.7 billion worth of leveraged positions vanished, sending shockwaves through the entire cryptocurrency market. Many investors had taken long positions, expecting the market to rise, but when prices moved lower, those long positions got wiped out. Short positions also suffered, although not as much, with $168 million in short liquidations compared to the $1.5 billion in long position losses. This large-scale selloff forced traders to think hard about the risks of leveraged position liquidations. As the crypto market cap shrank by about 7.5%, many tried to figure out why this sharp crypto market correction happened and what caused such a high level of damage in such a short time.
Bitcoin, the largest cryptocurrency by market cap, fell from above $100,000 to around $94,100. Ethereum also took a hit and dropped about 8% below $3,800. Even though Bitcoin started to recover a bit and recently reached about $97,800, it remained about 2% lower than it was 24 hours earlier. During these events, altcoins also struggled. Some of the top altcoins by market cap, such as Ripple (XRP), Dogecoin (DOGE), and Cardano (ADA), suffered double-digit losses. XRP fell about 11%, DOGE about 10%, and ADA about 13%. Traders who tried to find reasons behind this sudden crypto market crash leading to $1.7 billion in liquidations searched for signs, but no single event explained everything.
People speculated that Google’s new quantum chip, known as Willow, might have stirred fear. Some traders thought that quantum computing could threaten Bitcoin’s security. Google Quantum AI, led by Hartmut Neven, introduced Willow. This chip can perform tasks in minutes that would take today’s fastest supercomputers many lifetimes. Some in the crypto community worried that such quantum breakthroughs could break Bitcoin’s encryption. A few people said that $3.6 trillion in crypto assets may soon be at risk, or that Bitcoin might become worthless if quantum attacks become possible. Still, experts who study cryptography and digital gold say quantum computing is not yet advanced enough to break Bitcoin. Kevin Rose, a partner at True Ventures, said that hackers would need a quantum computer with about 13 million qubits to crack Bitcoin encryption in 24 hours. Willow only has about 105 qubits, which is far fewer than required.
Ben Sigman, a Bitcoin entrepreneur, explained that breaking ECDSA 256, a common form of Bitcoin encryption, would require millions of qubits. He added that something like SHA-256 would be even tougher. Right now, the threat to Bitcoin’s security from quantum computing remains low. While quantum computing is growing quickly, it is not close to the level needed to pose a serious risk to crypto wallets, exchanges, or other places where people store their private keys. Many believe that quantum-resistant cryptography will appear long before these chips can crack today’s strongest encryption methods.
Other rumors involved recent Bitcoin transfers from the Royal Government of Bhutan. Data from Arkham Intelligence showed that a wallet controlled by Bhutan’s government moved 406 Bitcoin to QCP Capital, a trading firm in Singapore. Bhutan’s Bitcoin moves did not stop there. It then sent about $19 million worth of Bitcoin to another address, and after that, these funds ended up in a Binance hot wallet. In the past month, Bhutan sold 367 Bitcoin for around $33.5 million through Binance. Some think that large transactions from a government wallet might have had a psychological impact on investors. Bhutan remains one of the top five government holders of Bitcoin worldwide, holding about 11,688 Bitcoin worth nearly $1.1 billion. Bhutan also acquires Bitcoin in a unique way. Instead of seizing assets like some countries have done, Bhutan uses its natural hydroelectric resources to mine digital assets. This method is a form of renewable energy that reduces the carbon footprint often tied to crypto mining. Yet the market did not respond kindly to these moves, and some investors saw it as a sign that even governments might sell when the price looks right.
As markets tried to recover, traders looked to corporate giants like Amazon and Microsoft to see if they would hold Bitcoin as a reserve asset. Amazon faced pressure from shareholders who asked its board to consider adding Bitcoin to the company’s treasury. The same think tank that pushed Microsoft to consider Bitcoin made a similar proposal to Amazon. The pitch is that Bitcoin acts as digital gold and can offer value over time. MicroStrategy serves as an example here. The firm bought large amounts of Bitcoin, and its stock price rose more than traditional stocks and bonds over the same period. By investing in Bitcoin, MicroStrategy’s stock price outperformed Amazon’s. Amazon’s shareholders requested that the board study if adding Bitcoin would serve their long-term interests.
Microsoft’s board has already told its shareholders to vote against holding Bitcoin as a reserve. The company said it studies many asset classes and keeps track of developments in crypto, but it has not made a move to adopt Bitcoin for its treasury. Crypto supporters mocked Microsoft’s stance, comparing it to Blockbuster failing to see Netflix’s potential. They argued that ignoring Bitcoin’s rise could be like ignoring a shift in how people store and share value. Microsoft’s board insisted that it looks at all the data and will keep monitoring cryptocurrencies, but for now, it has no plan to follow MicroStrategy’s approach.
MicroStrategy’s CEO, Michael Saylor, recently spoke to Microsoft’s board. He suggested that Microsoft could transform its treasury by shifting $200 billion into Bitcoin. He claimed this would boost shareholder value. According to Saylor, adding Bitcoin to its balance sheet could improve returns and reduce risk over time. He argued that Bitcoin is a superior asset when compared to traditional dividends or buybacks. MicroStrategy’s massive Bitcoin purchase, which was about $5.4 billion worth of Bitcoin last month, brought its total holdings to around $38 billion. The company sees Bitcoin as a hedge against inflation and a bet on the future of digital currency.
This push toward Bitcoin adoption is not only at the corporate level. Some want the US government to consider holding Bitcoin instead of gold. They say selling gold and buying Bitcoin would harm the value of gold held by adversaries and raise the value of US assets. Yet Jerome Powell, the Chair of the Federal Reserve, considers Bitcoin a speculative asset more like gold than a currency. He does not support the idea of a US Bitcoin reserve. The Federal Reserve cares about the health of the banking system and wants to avoid exposing it to large crypto risks. Powell’s stance matches the views of many regulators who prefer careful steps into crypto rather than sudden moves.
The US crypto regulatory environment is changing. The Trump administration has hinted at a friendlier stance toward Bitcoin, placing figures like Paul Atkins in roles that could shift rules at the SEC. This might support more crypto-friendly policies. Traders hope this will encourage more institutions to hold Bitcoin in their treasuries and more governments to welcome digital assets. Some see this as a sign that cryptocurrency is moving into the mainstream.
Many crypto enthusiasts still view Bitcoin as digital gold. They say it can store value, hedge against inflation, and offer a tool for those who want to avoid traditional financial systems. Crypto mining, which often uses large amounts of energy, now seeks cleaner options. Bhutan’s use of hydroelectric power is an example of how a government can mine Bitcoin using renewable energy. This also counters arguments that Bitcoin is always harmful to the environment.
The worry about quantum computing remains, but there is no reason to panic yet. Cryptographic systems can adapt, and experts believe we have a long way to go before quantum computers have enough qubits to break Bitcoin’s encryption. The digital asset world moves fast, but developers, miners, traders, and investors tend to find ways around new threats. Quantum-resistant algorithms, which can protect against future attacks, are already in development. By the time quantum machines become strong enough, the crypto industry expects to have solutions in place. For now, quantum computing might cause chatter and spark rumors, but it does not pose a real danger to Bitcoin’s security.
Large players like Amazon might join the crypto market in some way if they believe it adds value to their balance sheets. If Amazon includes Bitcoin in its treasury, it would boost the credibility of digital assets. Some think such a move could drive demand, raise prices, and push other big companies to follow suit. MicroStrategy’s example shows how owning large amounts of Bitcoin can pay off, at least so far, for investors who believe in Bitcoin’s long-term potential.
While Microsoft urged shareholders to reject a proposal for Bitcoin reserves, this did not stop debate. People mocked Microsoft’s reluctance and suggested it might miss an opportunity. They pointed to MicroStrategy’s success, while MicroStrategy’s CEO offered Microsoft’s board a roadmap on how to add Bitcoin and reap the rewards. Investors understand that corporate treasuries hold large sums of money. Shifting even a small part of that into Bitcoin could have large market effects. It might also push regulators to refine how they oversee crypto markets and enforce rules to protect investors.
News of a crypto market crash leading to $1.7 billion in leveraged position liquidations shocks the community. Traders must consider market conditions, understand the risks of taking on long or short positions, and follow events like Bhutan’s Bitcoin moves. Understanding the role of quantum computing breakthroughs like Google’s Willow chip matters too. The rise of quantum computing might sound scary, but experts say fears remain premature. Digital gold continues to appeal to those who want an asset outside the reach of central authorities. Regulators and policymakers will shape the future of crypto. Their views, along with decisions made by corporations and governments, will guide where digital currencies go from here.
For now, Bitcoin remains near $97,800 after bouncing back from its recent dip, and Ethereum, XRP, DOGE, ADA, and other altcoins wait to see if buyers step in. The crypto market still works through the reasons behind the selloff and weighs the potential impact of quantum computing. Investors watch governments like Bhutan adjust their holdings and major companies like Amazon and Microsoft consider if Bitcoin belongs in their treasuries. Even the Federal Reserve and the SEC keep a close eye on these trends. The price swings, the talk about quantum threats, and the push for more corporate adoption combine to create a unique landscape. Crypto enthusiasts continue to watch how this digital gold ages, how it stands against quantum computing, and how it fits into the balance sheets of the world’s largest companies.
