The story of wallets thinning out is replayed every day.

Last week, I heard a friend complain that he participated in a popular project’s staking, only to see the token price plummet all the way down, with another week to wait for the unlock period, and rewards still nowhere in sight. Such scenes are no longer rare this year.

The lively party has long since ended, leaving behind a mess. Let’s review some numbers: Bitcoin plunged from its all-time high of $126,200 in early October, briefly breaking below the critical support of $100,000. Ethereum? It also retreated from its high to around $3,000. The overall bearish trend in the crypto market is evident.

The most ironic reversal is happening in traditional assets. Silver surged about 140% this year, gold rose approximately 70%, both hitting new all-time highs. Those precious metals once mocked as “old fossils” by crypto enthusiasts have now become safe havens for capital. This signal of a shift couldn’t be clearer.

**Where exactly has the capital gone?**

At the beginning of 2025, everything seemed perfect. The launch of spot Bitcoin ETFs stirred a lot of funds to flow in, pushing Bitcoin prices to new records. But the momentum of this rally was not sustainable.

The ETF effect’s decline is just a surface phenomenon; deeper issues have long been lurking. The global macroeconomic environment has turned upside down — the US continues to raise interest rates and tighten liquidity, with investors’ risk appetite hitting rock bottom. Simply put: when the cost of capital rises, high-risk assets are always the first to be sold off.

Adding to this, the US government shutdown once again disrupted market rhythm. The US Treasury general account balance soared above $1 trillion, meaning a large amount of funds are frozen outside the Treasury, draining liquidity from the market. In such an environment, who can the crypto market rely on to save the day?

Capital has always been profit-driven, and now they’ve found safer places to go.