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Feb. 8, 2026 - Freedomain Radio - Stefan Molyneux
32:01
Why is Bitcoin Crashing? Feb 2026
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Time Text
February 6th Bitcoin Dive 00:05:05
It's bouncing back up.
This is Canadian 97.669.
And of course, just over the last month, it's gone from like 132 and change down to 97.
So, well, that's quite a dip.
That, of course, is quite a dip.
It's not as much of a dip as we've seen in the past, right?
I mean, it's 25% or something like that.
And it's certainly been worse in the past.
So I'll do this little chuggaroo and then we'll go private.
You can do questions and comments, whatever's on your mind, and we can take it from there.
All right.
So this is Bitcoin market report, 31st January to 7th of February, 2026.
Sharp volatility, significant decline, followed by a partial recovery.
This is going to be in US dollars, $78.7 at the close on January 31st to intraday lows near or below 60,000 by February 6th, marking roughly a 50% drop from its all-time high of approximately $126,000 in October 2025.
As of February 7th, 2026, Bitcoin trades in the $69 to $70,000 range, $2,000 above where teenagers start doing their imaginary juggling.
So there's a broad risk aversion across financial markets as a whole, declines in technology stocks, and even assets like gold and silver, much to the chagrin of Peter Schiff.
The total cryptocurrency market has also contracted substantially during this period.
So January 31st, Bitcoin closed at about 78.7 after a 6.5% drop that day.
This decline aligned closely with President Trump's nomination of Kevin Warsh as the next Federal Reserve Chair, which sparked investor concerns about potentially tighter monetary policy and reduced liquidity for higher-risk assets like Bitcoin.
Selling pressure continued in the following days, culminating in a severe plunge on February the 5th.
The price dropped more than 10% that day to close around 62.7%, with intraday lows not seen since late 2024.
This move reflected intensified risk of sentiment heavily, leveraged selling in liquidations across derivative markets.
And of course, you know, I wrote some of these programs back in the day.
There are these trading companies that have massive amounts, like three-quarters of trades or something like that are automated.
And there are stop losses where you say, okay, if the price dips below this, you just have to sell.
And if there's enough dominoes that way, then you just get a giant sell-off.
So on February 6th, this is the day that Anthony Pompeano published his analysis, Bitcoin briefly fell below 60,000 before rebounding strongly.
It posted one of its largest single-day gains in years, surging over 10% to 17% to close around 70,500.
The recovery continued modestly into February the 7th, though the price pulled back slightly to the mid-69,000s amid ongoing volatility.
Now, let me just see what is it at?
I'm not going to try and do that in my head.
What is it at in Bitcoin US dollars this morning?
71.3, up 2.4K and change.
So that is good.
That is good.
I mean, it's still 20.8% down from a month ago.
But I got to tell you, I don't sound overly financially tough.
It hasn't really bothered me at all.
It's all paper stuff.
It's like you haven't lost anything unless you sell.
Come on.
And it's not just Bitcoin.
I'll tell that story afterwards.
Yeah, should I tell that story now?
Yeah, so back in the day, of course, as you know, I co-founded and grew a software company to about 35 employees.
I mean, it wasn't massive.
It was pretty tidy business, though.
And we got bought out, and we got bought out by a parent company that was listed, then went public and was listed on a stock exchange.
I think it was, it doesn't really matter which one.
It was on a stock exchange.
And I had some shares.
And boy, you know, I wouldn't say penny stocks or anything like that, but it was quite a roller coaster of value.
Welcome to the circus of values.
And it was just up and down and sideways.
And it was kind of distracting.
I was working away at the business, and I also had a little stock ticker with the shares and the price and this, that, and the other.
And, you know, so to me, oh, 20% in a week or two, it's like, oh, man, that's nothing.
It's like when you've ridden a tsunami, a slightly choppy weather is not really a thing.
The Delta Between Expectations 00:13:12
It's not really a thing.
So that's just my sort of early conditioning.
And I've sort of said to you before the way that I sort of gaslight myself.
And I think, you know, gaslighting yourself from time to time is fine if it sort of ends up being productive and healthy in the long run.
But I just looked and say, hey, I hope it's not $50,000.
And then if it's like 92, I'm like, hey, that's great.
Whereas if you go, gee, I hope it's gone back to, you know, this is sort of in US dollars.
If you say, oh, man, I hope it's gone back to, I hope it's gone, I hope it hasn't gone down to like $40,000 or $50,000.
It's good.
It hasn't gone down.
It's all about expectations versus if you think, oh, I hope it's bounced back up and it's gone down a little more than that gap.
It's the delta between expectations.
And I'm just like, hey, I bet you it's gone down 30%.
Oh, fantastic.
It's only gone down 25%.
I couldn't be more thrilled.
I couldn't be more thrilled.
And that's a thing that I use.
It's a mental trick.
It's a gaslight, whatever you want to call it, but it's a very real phenomenon.
So what's going on with the price action?
Macroeconomic pressures, very important.
A more hawkish Federal Reserve under Warshlingon name, I'm sure, have reduced expectations for supportive liquidity conditions.
A tighter Fed just means there's less money in circulation.
If there's less money in circulation, then there's less money for speculative investments or more risky investments.
Of course, if there's less money in circulation, then inflation becomes less of an issue.
And you could even potentially get deflation.
And if you get less inflation or some deflation, then of course, Bitcoin as a safe haven against inflation becomes less compelling, right?
If you're out there on the sea and the sea is angry and you're heading towards a rickety harbor just to tie yourself up and take shelter from the storm, and then the sun breaks through and the calm hits the waves and everything's, and you're like, ah, you know, maybe we don't need to go to that, right?
That shelter.
Of course, I guess you could say to some degree, the reduced population agenda in America of ICE actually enforcing immigration laws and removing, in particular, illegal aliens who have violent criminal records.
The lowering of the population in America is deflationary, right?
There's less demand for everything if there are fewer people in the country.
So there's deflation there.
So all the people who want ICE to do its job are going to put Bitcoin's rise on ICE, if I dare say so.
I'm so sorry.
I heard that one.
I'm like, there is a low in the jokes that I make, but I suppose if we're talking about highs and lows, I'm not sure I can go lower.
I mean, I always set myself that challenge.
Usually I achieve it, but it's always a bit of a surprise to everyone.
So Anthony Pompliano, man of the eternal laser-eyed grin.
Pompliano highlights the financialization of Bitcoin.
The asset has evolved from a straightforward holdings-based investment into one intertwined with ETS, futures, options, and other instruments.
This has enabled new forms of exposure, hedging, and potential forced selling.
He points to psychological effects, such as long-term holders taking profits after Bitcoin crossed the $100,000 milestone, believing its mainstream adoption phase was actually complete.
Now, let's not forget.
Let's not forget something quite important.
And what is quite important is that early Bitcoiners are getting old.
I mean, certainly getting older, right?
So Bitcoin is what?
15, 16 years old.
And it usually wasn't the real young whippersnappers who were getting into Bitcoin because you had to have some appreciation and understanding of, you know, maybe Austrian economics or computer stuff as a whole.
And so I would imagine it would be tough to get into Bitcoin.
I mean, with some exceptions, of course, right?
But I would assume that they're sort of older, right?
I was probably a little older even then than most.
And so if you get into Bitcoin, let's say at 35, like if you're real early, you're 50.
You know, 30, 45, 40, 55, right?
45, 60.
And there was a pretty hilarious exchange with the giant snail tongue bassist from KISS, Gene Simmons.
And somebody said, Gene Simmons said something like, well, you've got to hold on to Bitcoin.
It's a long-term investment.
And someone said, bro, you're 80.
What are you thinking about long-term investments for?
If I was in your shoes, I wouldn't buy a green banana, which is pretty funny.
It's only funny because I'm not 80.
It's pretty funny.
Wouldn't buy a green banana.
But there's kind of a truth to that.
Like, if you're, you know, if you were 40 and now you're 55, I mean, you want to spend some money.
I mean, you don't want to be like some Howard Hughes miser head, right?
You want to spend some coin, blow some of that sweet digital gold.
I mean, especially, especially this is true if, oh, I don't know, it would be an interesting correlation that we'll probably never find out.
It would be interesting to see the correlation between people who are really into Bitcoin and their fertility rate.
But in particular, if you got into Bitcoin at 30 and you're now 45 or 35 and you're now 50 and you didn't have any kids, you got no one to leave the money to.
You want to sell, you want to spend.
And that factor should not be underestimated.
I mean, there definitely are the idealists, and that's all great, but there are also, you know, people who just like who are sitting on this digital gold worth quite a lot and they actually want to sell it.
And if it looks like inflation is going to be less of an issue, then it's less horrible to sell, right?
All right.
So the $100,000 milestone.
Community expectations around the traditional four-year market cycle, often involving sell-offs roughly 18 months after halving, have also encouraged preemptive selling.
Anticipation creates actions and actions create reality, right?
So there are these patterns, of course, in Bitcoin.
I'm sure you've seen that schizophrenic random chart drawing, which is like, I finally figured out Bitcoin's patterns.
And of course, the patterns are the perception, right?
If everyone believes that there's a sell-off 18 months after halvings, then, you know, 17 months after halvings, they sell things to rapa and all of that.
And of course, you know, there's an old saying in the financial world, which is that the people who maketh the money of one bear cycle are the people who've been through previous bear cycles.
And if you've been through a bear cycle, like honestly, 20, 25% drop, I mean, Bitcoin's gone down 80, 90% at times.
And then there are all these people, and I assume I don't know if they're bots put out there on X. Bitcoin has no intrinsic value.
Nobody has ever been able to explain to me the value of Bitcoin.
Oh, it's so confusing.
Oh, my God.
I mean, anybody who uses the phrase intrinsic value is an idiot.
I mean, we just had this discussion yesterday.
There's no intrinsic value.
There's no such thing.
Well, gold has intrinsic value.
No.
No, gold does not.
You can't eat it.
Gold doesn't have all the gold I could eat.
Gold doesn't have intrinsic value.
Gold is dependent upon other people wanting gold.
Other people wanting gold.
I mean, food doesn't have intrinsic value because it depends on whether somebody wants to eat.
I know.
So most people do want to eat.
Yeah, I mean, I get that for sure.
I mean, you're not going to bake a bunch of bread, open a bakery, and say, oh, my God, nobody wants to eat bread.
I mean, I get that.
People want to eat it.
But food rots in the barn.
This is a big problem before transportation is that you'd have a famine, you know, 10 miles away from a place where there was so much excess food, it was rotting in the barn.
There's a demand, but there's no way to get the easily get the food to the hungry people.
They may not, in fact, even know that there are those hungry people.
So what is the intrinsic value?
It's the demand that could be materialized and actualized.
Intrinsic value.
And of course, I marked someone who's like, oh, Bitcoin doesn't have any intrinsic value.
And it's like, bro, you post all the time on X.
So clearly, what is the intrinsic value of your account on X?
There isn't any.
There isn't any.
And so your digital landscape, your digital property, you assume has value.
And it's a digital property with no intrinsic value.
But you assume that it has value.
You've already broken and said digital information with no intrinsic value has value.
Anyway, which is, I don't know.
I think 90 to 95% of philosophical questions or even economics questions are solved by just slowing down and looking at what you're doing and getting those principles.
Sorry, I should not be quite so rude.
And I should, I apologize.
I should check in and see what you have to say.
All right.
Oh, is this not?
Is the audio coming and going?
Is it the wrong?
No, it shouldn't be.
Hang on.
Sorry.
I see.
This is why I should check.
All right.
Oh, okay.
That's not good.
My apologies.
I got it recorded locally here.
All right.
So let me know if that is better.
Let me know if that would be better.
My apologies.
I did choose the right one.
I'm not going to blame the interface, but that should be better.
Yes.
Okay.
My apologies.
My apologies.
Okay.
See, that's why it's so important to chat.
And yes, I think better when I just so you know, I mean, in case you ever care about the behind-the-scenes stuff, I don't mind sitting in the studio.
It's fine, but I think better when I'm walking around.
So I do try to get as much movement in as possible.
And it's actually kind of shown that people think better and blood flow is better to the brain.
When you are moving.
So, okay, so institutional flows added to the pressure.
Notable outflows from U.S. spot Bitcoin ETFs.
These ETFs are the vehicles that let traditional investors gain exposure without directly owning the asset earlier in the period.
Record trading volumes in certain ETF options and high activity suggest involvement from sophisticated players, including possible leverage positions tied to other markets.
Liquidations in derivatives amplified the downside, creating cascading sales.
So it's not a single cause, right?
It's a, you know, I've said this to people over the course of my life, if they have something bad that happens and so on, that usually when bad things happen, it's the overlapping of a whole bunch of coincidental circles.
And I think it's the same thing, same thing here.
So a 50% drawdown from all-time highs, consistent with Bitcoin's history of similar corrections about every 18 months.
Comparable in frequency to major financial crises, but part of the assets maturation process.
Sentiment reached extreme lows during the decline with the Fear and Greed Index, a composite measure incorporating volatility, market momentum, and social media trends, falling to historic depths around 5 to 13 out of 100, indicating extreme fear.
Technical indicators such as the relative strength index hit rarely seen oversold levels.
Discussions across platforms reflected panic among some participants, though long-term holders emphasize resilience, having managed multiple prior drawdowns.
Lump in the Armpit 00:04:00
As Pompliano said, Bitcoin enthusiasts are, quote, built for this type of chaos in markets.
Future outlook.
It is impossible to predict Bitcoin's price with certainty.
Of course, of course, of course, it's global events, policy shifts, collective investor behavior, individual preferences.
You know, like this is a sort of example.
This is why you can't.
So if there's some whale out there, I don't know, he's got, you know, $500 million in Bitcoin.
And bro wakes up one morning with a lump under his armpit.
And he's like, holy shy's the balls, Batman, that could be bad.
And he goes to a doctor.
Let's say he's not in Canada.
He can see a doctor in less than six months.
So he goes to a doctor and the doctor feels it and says, oh, that's not great.
And there's a biopsy and it turns out it's benign or it can be removed and it's not cancerous and so on.
Well, what is his relationship to sitting on half a billion dollars worth of Bitcoin when he just had a big health scare?
You know, seize the day, go do some fun things.
Don't just sit there watching candles on your screen all day and night.
He's going to want to go out there in the world.
He's going to be jolted out of his hypnosis, right?
So the day-to-days, day-to-day is hypnotic, right?
Every day you, you know, you get the stuff done that you need to get done.
You do some of the stuff that you want to do, and it's hypnotic, especially for men, because we age like women age like candles, right?
Just you can see it burning down because they get the TikTok of periods and they age out of fertility.
And so they've got a time sensitivity.
You're like, we age like an abandoned metal train in the desert.
There's just this very slow rusting.
And so life is kind of like this hypnotic conveyor belt of similar days until something jolts you out of that and reminds you you're going to freaking die.
And so if you can't predict the price because you don't know who's going to wake up with a lump under their armpit, turns out to be really bad or not so bad or whatever, right?
But they're going to sell.
They're going to sell.
It could even be this guy's, you know, wakes up, getting a lump in his armpit.
He wakes up and he goes to his local Bitcoin meetup with other long time Google-enabled hodlers.
And he's like, yeah, man, I just got this lump on my armpit.
I don't know.
It could be cancerous.
I just have swollen lymph nodes.
It could be anything, right?
I mean, but I'm kind of scared.
And they're all like, holy shit, that's bad for us.
Yes.
So it's not just you.
It's not you who has to experience these things, but other people you tell these stories to also get jumped off the hypnosis of the copy-paste day-to-days.
It's particularly true if you don't have kids.
When you have kids, like I had a dream this morning about my daughter being very little.
It was a wild dream.
My daughter was very little.
And I was traveling.
And I had lost a bag while I was traveling, which is kind of like a dream that people have a lot, right?
Because traveling used to be fun.
Now it's just kind of high stakes.
And my daughter had made a balloon animal, even though she was like a baby.
She'd made a balloon animal in the shape of a dog.
And my neighbor had built a skating rink in my backyard.
We have these lovely neighbors we get along with really well.
And my neighbor had built a, and it was still freezing, like you just hose it down.
He built a skating rink in my backyard.
It was wild.
It was wild.
Something to do with ice, I bet.
So, yeah, you can't predict these kinds of things because you never know who's going to wake up with a lump in their armpit.
That's my big, big investment tip of the day.
Bubble Of Greed 00:09:42
Near-term trends point to a market that may have seen significant capitulation, which is the exhaustion of selling, which historically sets the stage for stabilization of relief rallies, especially given the deeply oversold technical conditions.
Potential catalysts for further declines, yeah, persistent risk aversion in broader markets, weaker than expected U.S. economic data, such as upcoming employment or inflation reports, continued net outflows from ETFs, or breaches of key technical support levels.
And the other thing, too, right?
The other thing that's a big, big issue in Bitcoin, or with Bitcoin, is this.
It's that it's people's perception or fear that it's all been a mad dream that it's tulips in Amsterdam.
It's a South Sea bubble.
It's a complete fantasy village.
It's a Ponzi scheme.
It's a bubble.
It's a mania.
It has no intrinsic asset.
And we all just got hypnotized by greed.
And we're in the desert and we're thirsty.
And we've spent a long time moving towards this oasis, this river, this lake.
And it suddenly seems to shimmer and disappear.
It's a mirage.
It's not real.
It has no intrinsic value.
It spits and burps on computer servers.
And we're all waking up from a mad collective fantasy of value.
Oh, my God, what have I done?
I put my entire life savings into Hawk Tua meme coins.
Ah!
And it, you know, I assume that all of this, it has no intrinsic value.
It's a bubble.
There's all just bots from people who want to buy Bitcoin at a discount.
Right.
So if you've ever been involved in real estate transactions, right, one of the – and if you find real estate agents that don't do this, you know, hold on to them for dear life.
Hoodle them close to your heart.
But what do they say?
They make you afraid.
They make you afraid.
Ooh, you know, the seller's really getting antsy.
There's another buyer who's offering as much as you are.
And, you know, they're not happy.
They're not pleased.
And I think they're going to go with the other buyer.
Just I hate to say it would be the bearer of bad tidings, but I know you want, you know, 5% lower, but, you know, there's somebody, I mean, they like you, but they're getting a little impatient.
And there's somebody else coming in who's deep pockets and is a very motivated buyer.
So I'm just telling you, if you want to close now, you'll get it.
If you hold off even for another day or two, I can't guarantee anything.
So they're going to, you know, you're going to lose like all the time, investment.
And, you know, when you want to buy a place, you get invested.
You love this place.
You imagine your kids running around in the yard.
That furniture could go there and the chandelier is nice, whatever, right?
And your wife starts to imagine cooking in that nice new kitchen.
Because women's relationship with kitchens is highly ambivalent, to say the least.
If you ever want to have, you ever want to have a great evening's conversation, you just sit your wife down and say, honey, okay, imagine an unlimited budget.
Just imagine this.
Imagine an unlimited budget and unlimited time.
Tell me everything you would change about this kitchen.
Boom!
You are away to the races.
She will summon language that even a sailor who stubs his toe on a porcupine would faint before.
Anyway, so it's just a kind of a thing.
So when people are out there, oh, Bitcoin, no value.
It has no intrinsic value.
It's just, it's a bubble.
It's a fantasy.
And people are like, oh, my God, I got to convert this fake stuff to real stuff.
I mean, look at NFTs.
And it's true.
NFTs was a smidge of a mania, right?
People paid sometimes over a million dollars for NFTs that are now worth a bag and a half of Doritos.
So that was a thing.
All right.
So improvements in market liquidity if the U.S. Treasury eases funding pressures or advancements in stalled cryptocurrency regulations might restore confidence.
I mean, I sort of hate to say if it's political, if it's political this way, but I think Trump's kids are pretty crypto heavy.
If there's renewed institutional buying at lower prices, of course, if the risk assets as a whole recover or if people's deflationary concerns ease up.
So, of course, you know, Bitcoin's fixed supply cap of 21 million coins and ongoing institutional adoption remain unchanged.
So, it's a potential.
I don't, you know, of course, you know, when people say Bitcoin is going to zero, which is its actual value, I mean, of course, there's a little bit.
I mean, I just get angry at that kind of stuff.
I mean, yeah, people can say what they want.
It's all just opinions.
But people who claim to know what they simply cannot know and when they don't understand things, that is crazy.
It's a lie.
It's a lie.
You know, and I push back on this on X. Bitcoin has no intrinsic value.
And it's like, but every single fiat currency goes to zero.
Every single.
In fact, fiat currency doesn't just go to zero.
It leaves you with massive debt.
At least if Bitcoin goes to zero, not that it will, but if Bitcoin were to go to zero, it doesn't leave you, it doesn't leave massive intergenerational debt and unfunded liabilities.
And if it is bouncing back now, which it may, who knows, could be a dead cat bounce, could continue to go down.
I'm not even going to remotely pretend to predict the price.
I mean, of course, I've always had three-quarters of a million U.S. Bitcoin as I mean, I was talking about this like, I don't know, 10 years ago or whatever.
That's sort of my general gut sense.
Not that that's any kind of investment advice.
What do I know?
But that's my sort of gut sense.
Don't buy or sell based on anything that I'm saying.
This is all just opinions.
So, yeah, so that's the thing.
All right, so sorry, let me just get back to your thoughts.
Hello, Kay.
But I did like the echo.
It sounded like you were talking in a hallway.
Yes.
All right.
On a large enough time scale, indeed, it doesn't matter.
70K to 500K, 100K to 500K is marginal.
Yeah, yeah.
Good morning.
Good morning.
I agree as time goes on, you don't get bothered by the up and down trends.
Eventually, fiat money will collapse.
Good morning.
Good morning, everybody.
It's all about protecting your mind from psychological infection.
Alex Jones used to say: there's a war for your mind.
Love your show.
Thank you.
So far, this show sucks.
You should do something different.
Oh, that's funny.
That's great.
Love it.
Love it.
I mean, yeah, so you can't.
No one gives a shite about your ball, Cancer.
That's really funny.
Somebody says, for sure, that's how I look at it.
However, I do like buying 10,000 sats for $10 versus $7,000 for the same $10.
It feels great.
Somebody says, I get so sick and tired of managing my life around others' inability to manage their own psychology.
Yeah, that's true.
That's true.
This guy is control.
Actually, not a very good troll.
No one gives a shite about Bitcoin.
No one gives a shite about you getting old.
Sorry that you're so lonely.
All right.
The naysayers will decry Bitcoin's volatility out of one side of their mouths and then endlessly complain about fiat inflation out of the other side.
Yeah.
Boom, boom, boom.
All right.
We can go private.
We can keep the general broadcast.
I will let the donors on.
Locals, if you say, let's do P for private, P for public.
No, I'm just kidding.
If you say, oh, we'll keep it open.
If you say P, we'll take it private.
I will let you choose.
I'm happy either way.
Do we want the kimono blowing in the wind and getting that absolutely lovely little shiver of wind in the nether regions?
Or do we want to close it off?
All right.
Private.
Absolutely.
All right.
So these are the two questions which I will answer private.
Somebody says, during the Sunday live stream on January 25th, you mentioned that Christianity made an error in trying to send out their message of universal morals around the world.
Can you expand on this error and its manifestation in current times and its implications for the future?
What do you think would have been a better course of action?
That's number one.
Number two, Steph, on recent live streams, you mentioned that quote from your book, the truth is not a sword to be drawn at all costs.
I still don't fully understand it.
Would you be willing to share a bit more explanation on the topic?
Yes, I would.
I would.
Okay, so let's take ourselves.
Local supporters only update stream.
Those are really, really great questions.
And yes, if you want to head over to locals, if you log in there, we'll keep the conversation going there.
And of course, I'm happy to take calls on the locals platform as well.
For those who are just listening publicly, free demand.com slash I need to help out the show.
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