What is happening in the market?

February opened with a bang as crypto sentiment has slipped back into extreme fear, and we’ve seen sharp moves across broader markets. Gold and silver have both dropped considerably, with Silver plunging over 30%.

If you’re feeling uneasy and nervous about what you’re seeing, I want to reassure you that this is not unexpected. So let’s come together and take a look at what’s happening in this market.

Let’s start with the facts: We should expect extreme volatility over the next few weeks.

Crypto is moving alongside other risk assets as markets react to geopolitical tensions, trade concerns, and general uncertainty. And when volatility rises and negative headlines take over, we often see it reflected as a drop in retail participation. This is because many retail investors think in terms of weeks or months, not years. That alone makes uncertainty itself feel like a risk.

That’s where we, as educators, try to slow things down, add context, and help you see what’s happening beyond the price action.

If you’re a DWG member, you’ve probably watched last week’s update where we walked through the upcoming headwinds that would heavily unsettle markets. We’re seeing some of those play out right now.

In other words, this is not new news.

So what’s driving this particular drop?

There isn’t just one cause – it’s a few things converging at once.

A change in US rate expectations
Markets reacted to news that Donald Trump nominated Kevin Warsh for Federal Reserve Chair. Warsh supports higher interest rates and tighter control over money flowing through the economy. This matters for crypto because risk assets perform best when money flows freely. When investors expect interest rates to stay higher for longer, they often reduce exposure to higher-risk assets. After this announcement, the US dollar strengthened, which added further pressure to crypto prices.

However.

Kevin Warsh has consistently spoken about Bitcoin in a measured and pragmatic way. He sees it as an important asset that helps keep monetary policy in check by signalling when central banks misstep. He has also compared Bitcoin to gold as a store of value, particularly for younger generations who see it as a digital alternative to traditional assets.

Warsh also understands the crypto space at a practical level. He has invested in crypto-related projects and spoken positively about blockchain as a powerful new software layer with real-world potential. That perspective sets him apart from policymakers who have historically dismissed or misunderstood this technology.

So what feels unsettling to some now, may ultimately support greater legitimacy and long-term growth. This appointment could prove constructive for crypto once short-term volatility passes.
Lower weekend trading amplified the move
Trading volumes typically drop on weekends, which allows prices to move more sharply than usual. As prices fell, traders using borrowed money had to close positions automatically. These forced sales pushed prices down further. So this chain reaction accelerated the move.
Technical selling added pressure
When Bitcoin dropped below key price levels, automated sell orders kicked in. These orders added more selling pressure and sped up the move lower. High leverage across the market made the downside feel faster and heavier than usual.
The US government shutdown added another layer of uncertainty
The partial US government shutdown is underway, adding extra uncertainty to an already fragile market. Shutdowns pause government spending, salaries, and contracts, which reduces short-term money moving through the economy. They also delay economic data and regulatory decisions. In thin weekend markets, headlines like this often push investors into a defensive posture and amplify price moves.

What we’re seeing is a short-term liquidity and confidence shock. It looks chaotic in the moment, but I’d like to offer a reminder: these markets tend to have a very short memory.

For instance, in 2024, Japan raised short-term interest rates for the first time in 17 years. So all the cheap borrowing suddenly became much more expensive. Investors rushed to unwind their positions, creating a wave of selling across global markets. Bitcoin fell roughly 15–20% in a short period, while many altcoins dropped even more.

It looked like absolute carnage.

But prices rebounded and went on to test all-time highs again within a matter of 3-4 weeks. (Yes you read right).

This is how resilient (and often unexpected) this crypto market has become.

At DWG we openly share potential headwinds with members. It’s not to panic or alarm you, it’s to arm you with knowledge of potential hurdles, so you don’t get shaken out by the noise when they happen.

We know that macro events can disrupt confidence, and the media amplify fear and whip people up into a frenzy. When you add the pressure many of us place on ourselves to ‘be right’ about crypto, it becomes easy to react or make rushed decisions. It can create a perfect storm of destabilisation.

But it doesn’t have to be that way.

One of the most important skills an investor can develop is staying calm in the chaos, and not letting emotions get the better of us. And I know – it’s not always easy! But it’s often where the real work is, and where the real edge lies.

As retail investors, it’s hard for us to copy institutional strategies exactly, but we can adopt the way institutions think. They understand that volatility doesn’t automatically mean something is getting worse.

Overall, I still believe we’re heading into a strong year for risk assets. Nothing about my thesis or conviction has changed. On a fundamental level, governments will continue to print money, as they always have, and quality assets will be the winners over time. There will be bumps along the way, in both crypto and traditional markets, but volatility alone does not signal the end of a cycle.

In fact, I’ve been educating through three market cycles, and I can say honestly that I’ve seen sentiment far worse!

These were the headlines in 2018 before Crypto had any real smart backing.

Imagine if I had listened to this?

I can assure you, I would not be in the same financial position I’m in today.

Instead, I let the market do the lifting and took the emotion out of the game.

So I’m going to say everyone’s favourite trigger word one more time….

Patience.

Yes, there are macro pressures still ahead, as we outlined on Wednesday night. The difference in this cycle is the foundation underneath the market. ETFs, institutions, and strategic reserves are now part of the picture, and that level of structural support simply didn’t exist in earlier cycles.

If you have conviction in your chosen projects, and you believe in this asset class like we do, take a step back and allow the market to move through this phase.

I believe we’ll come out much stronger on the other side.