Bitcoin's limited supply won't help stop the selloff

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Bitcoin's limited supply won't help stop the selloff

Your day-ahead look for Feb. 5, 2026

By Omkar Godbole|Edited by Sheldon Reback

Feb 5, 2026, 12:23 p.m.

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(Midjourney/Modified by CoinDesk)

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By Omkar Godbole (All times ET unless indicated otherwise)

With bitcoin's BTC$69,270.10 bear market raging and the price dropping to the lowest since November 2024, its core pitch, a hard cap of 21 million supply, faces fresh skepticism.

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Some observers say that alternative investment vehicles like ETFs, cash-settled futures and options and other services like prime-broker lending have diluted that scarcity appeal. These tools let investors access bitcoin without owning the real thing, creating a "synthetic supply" that floods the market.

"Once you can synthetically manufacture the supply, the asset is no longer scarce, and once scarcity is gone, price becomes a derivatives game, not a supply-and-demand market. This is exactly what has happened to Bitcoin," veteran analyst and writer of The Kendall Report, Bob Kendall, wrote on X.

Gold, silver, oil and equities saw a similar structural change with the debut of alternative investment vehicles, Kendall wrote. In 2023, CoinDesk highlighted how financialization of BTC creates paper claims that mimic abundance in a market defined by raw scarcity.

This is also why investors should tread carefully with onchain metrics like the "percentage of illiquid supply," because these don't account for massive "paper supply" from ETFs and futures that dilute the 21 million cap.

In the market, bitcoin lost even more ground, falling below $70,000 for the first time in more than a year.

According to veteran chart analyst Peter Brandt, the selloff has all the hallmarks of campaign selling, or coordinated selling by institutions and large traders rather than retail capitulation. Brandt is not sure at what level or when the decline will halt.

Most observers expect a slide to under $60,000 while firms like Stifel fear a more profound decline to $38,000, given the strengthening correlation with tech stocks, which have also taken a beating lately.

Hyperliquid's HYPE remains the only consistent hideout. The token is up 11% on the year, while BTC is down nearly 19%. One other interesting token is TRX, which is down just 2%, outperforming the broader market possibly, on the back of dip buying by treasury firm Tron Inc.

In traditional markets, Wall Street's so-called fear gauge, the VIX index, is revisiting January highs above 20.00, signaling risk aversion. U.S. Treasury market action suggests expectations for a smaller Fed balance sheet. Stay alert!

Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today

What to Watch

For a more comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead".

• Crypto
  • Feb. 5: Zilliqa to undergo its hardfork enabling Cancun.
• Macro
  • Feb. 5, 2 p.m.: Mexico interest-rate decision (Prev. 7%)
  • Feb, 5, 4:30 p.m.: Fed balance sheet for the period ending Feb. 4
• Earnings (Estimates based on FactSet data)
  • Feb. 5: Bullish (BLSH), pre-market, $0.15
  • Feb. 5: Strategy (MSTR), post-market, -$18.64
  • Feb. 5: IREN Limited (IREN), post-market, -$0.18
  • Feb. 5: CleanSpark (CLSK), post-market, -$0.02

Token Events

For a more comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead".

• Governance votes & calls
  • Feb. 5: PancakeSwap to host an ask me anything (AMA) session with Arbitrum.
  • Feb. 5: Olympus to host a community call with a live Q&A session.
  • Feb. 5: Aster to host an AMA session with its CEO.
• Unlocks
  • Feb. 5: XDC$0.03278 to unlock 5% of its circulating supply worth $31.52 million.
  • Feb. 5: ENA$0.1304 to unlock 2.31% of its circulating supply worth $26.46 million.
• Token Launches
  • No major launches scheduled.

Conferences

For a more comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead".

• Day 1 of 2: Digital Assets Forum (London)

Market Movements

• BTC is down 1.62% from 4 p.m. ET Wednesday at $71,467.00 (24hrs: -6.52%)
• ETH is up 0.24% at $2,130.50 (24hrs: -5.93%)
• CoinDesk 20 is down 1.68% at 2,077.53 (24hrs: -7.15%)
• Ether CESR Composite Staking Rate is up 18 bps at 3.01%
• BTC funding rate is at 0.0008% (0.8793% annualized) on Binance

• DXY is up 0.29% at 97.90
• Gold futures are down 1.22% at $4,890.20
• Silver futures are down 7.55% at $78.02
• Nikkei 225 closed down 0.88% at 53,818.04
• Hang Seng closed up 0.14% at 26,885.24
• FTSE is down 0.43% at 10,357.59
• Euro Stoxx 50 is down 0.36% at 5,949.05
• DJIA closed on Wednesday up 0.53% at 49,501.30
• S&P 500 closed down 0.51% at 6,882.72
• Nasdaq Composite closed down 1.51% at 22,904.58
• S&P/TSX Composite closed up 0.56% at 32,571.55
• S&P 40 Latin America closed down 2.89% at 3,653.05
• U.S. 10-Year Treasury rate is down 0.8 bps at 4.27%
• E-mini S&P 500 futures are unchanged at 6,904.75
• E-mini Nasdaq-100 futures are up 0.14% at 25,033.50
• E-mini Dow Jones Industrial Average Index futures are down 0.25% at 49,466.00

Bitcoin Stats

• BTC Dominance: 59.26% (-0.39%)
• Ether-bitcoin ratio: 0.02981 (1.56%)
• Hashrate (seven-day moving average): 913 EH/s
• Hashprice (spot): $32.02
• Total fees: 3.22 BTC / $240,320
• CME Futures Open Interest: 114,080 BTC
• BTC priced in gold: 14.6 oz.
• BTC vs gold market cap: 4.77%

Technical Analysis

HYPE's daily chart. (TradingView)

• The chart shows daily price swings in decentralized exchange Hyperliquid's HYPE token.
• HYPE's price has surged past the trend line that characterizes the decline from September highs.
• The breakout indicates that the path of least resistance is to the higher side and shifts focus to resistance at $50.

Crypto Equities

• Coinbase Global (COIN): closed on Wednesday at $168.62 (-6.14%), -1.51% at $166.07 in pre-market
• Circle Internet (CRCL): closed at $55.05 (-1.98%), -1.25% at $54.36
• Galaxy Digital (GLXY): closed at $20.16 (-8.28%), -1.49% at $19.86
• Bullish (BLSH): closed at $27.20 (-1.59%), -0.51% at $27.06
• MARA Holdings (MARA): closed at $8.28 (-8.51%), -1.81% at $8.13
• Riot Platforms (RIOT): closed at $14.14 (-7.82%), -1.34% at $13.95
• Core Scientific (CORZ): closed at $16.15 (-8.96%), +0.37% at $16.21
• CleanSpark (CLSK): closed at $10.22 (-10.04%), -1.47% at $10.07
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $40.29 (-11.06%)
• Exodus Movement (EXOD): closed at $10.70 (+2.20%)

Crypto Treasury Companies

• Strategy (MSTR): closed at $129.09 (-3.13%), -3.24% at $124.91
• Strive (ASST): closed at $0.59 (-13.20%), -6.74% at $0.55
• SharpLink Gaming (SBET): closed at $7.08 (-7.57%), -2.54% at $6.90
• Upexi (UPXI): closed at $1.36 (-12.26%), -2.21% at $1.33
• Lite Strategy (LITS): closed at $1.06 (-7.83%)

ETF Flows

Spot BTC ETFs

• Daily net flows: -$544.9 million
• Cumulative net flows: $54.73 billion
• Total BTC holdings ~1.28 million

Spot ETH ETFs

• Daily net flows: -$79.4 million
• Cumulative net flows: $11.94 billion
• Total ETH holdings ~5.92 million

Source: Farside Investors

While You Were Sleeping

Miners are being squeezed as bitcoin’s $70,000 price fails to cover $87,000 production costs (CoinDesk): Bitcoin is now some 20% below its estimated average production cost, increasing financial pressure across the the crypto mining industry.

Precious metals, oil slide as global tensions ease; copper down (Reuters): Prices of commodities from silver and gold to crude oil and copper dived on Thursday as global tensions eased after talks between China and the U.S., which is also set to sit down with Iran.

Trillion-dollar tech wipeout ensnares all stocks in AI’s path (Bloomberg): Hundreds of billions of dollars were wiped off the value of stocks, bonds and loans of companies big and small across Silicon Valley, with software stocks at the epicenter.

Crypto Daybook Americas