Bitcoin News Today: Cryptocurrency Stocks and Assets Plunge Amid Market Volatility and $642M Liquidations

Cryptocurrency-related stocks and digital assets experienced a sharp decline in late August 2025 amid heightened market volatility, reflecting broader risk-off sentiment across global financial markets. Major crypto equities, including Coinbase, Circle, and MicroStrategy, all saw their share prices fall by over 2.6%, with some firms experiencing even steeper drops—Bullish and BTCS fell by 5.31% and 4.47%, respectively [1]. This downturn coincided with a drop in major cryptocurrencies, including Bitcoin, which fell below 113,000 USDT, marking a 1.85% drop in a single day [4].

The sell-off was driven by a series of sudden price swings in the cryptocurrency market. On August 18, Bitcoin dropped below $111,000 after a large whale dumped 24,000 BTC in a flash crash, triggering $550 million in liquidations [7]. A few days later, on August 21, Bitcoin plunged $4,000 within minutes, signaling a sharp spike in intraday volatility that affected order execution and leveraged trading strategies [9]. Over the next 24 hours, liquidations reached $642 million, wiping out large leveraged long positions as the market struggled to stabilize [8].

The decline was not limited to individual firms or digital tokens. Defi Development, a firm closely tied to the crypto sector, saw its stock plummet 12.17% in pre-market trading on August 25 due to regulatory uncertainty and broader market instability [3]. Galaxy Digital also experienced a decline following its announcement of plans to launch a $1 billion Solana treasury fund, a move that coincided with a broader pullback in crypto-related equities [10].

The recent volatility contrasts with Bitcoin’s relatively stable performance since 2022, a period in which it was less volatile than major Wall Street stocks like Nvidia [5]. However, the current market dynamics highlight the crypto sector’s continued susceptibility to extreme price swings, particularly amid macroeconomic uncertainty or regulatory shifts.

The crypto market’s correlation with broader financial markets has become increasingly evident, with declines in crypto stocks and digital assets mirroring broader market sentiment [2]. As leveraged positions are frequently liquidated and large price swings become more common, investors and traders are growing increasingly cautious about their exposure in the sector.

Sources:

[1] US Stock Market Opens Down, Cryptocurrency ... (https://www.ainvest.com/news/stock-market-opens-cryptocurrency-stocks-decline-market-volatility-2508/)

[2] Crypto Today: Bitcoin, Ethereum, XRP edge lower amid ... (https://www.mitrade.com/insights/news/live-news/article-3-1066905-20250825)

[3] Defi Development Plunges 12.17% Amid Regulatory ... (https://www.ainvest.com/news/defi-development-plunges-12-17-regulatory-uncertainty-2508/)

[4] Cryptocurrency Live News & Updates : Bitcoin (BTC) Falls ... (https://m.economictimes.com/crypto-news-today-live-25-aug-2025/liveblog/123489092.cms)

[5] Bitcoin's Volatility Drops as It Matures, Setting the Stage for ... (https://www.mitrade.com/insights/news/live-news/article-3-1066922-20250825)

[7] Bitcoin Flash Crash Triggers $550M in Sunday ... (https://www.coindesk.com/markets/2025/08/25/bitcoin-flash-crash-triggers-usd550m-in-sunday-liquidations-as-ether-rotation-builds)

[8] $642M in longs wiped out as Bitcoin drops to lowest price ... (https://cryptoslate.com/insights/642m-in-longs-wiped-out-as-btc-and-eth-lose-ground/)

[9] Bitcoin (BTC) plunges $4000 in minutes: intraday volatility ... (https://blockchain.news/flashnews/bitcoin-btc-plunges-4-000-in-minutes-intraday-volatility-spike-and-trading-risk-alert)

[10] Galaxy Digital stock falls amid plans for $1B Solana ... (https://www.investing.com/news/stock-market-news/galaxy-digital-stock-falls-amid-plans-for-1b-solana-treasury-fund-93CH-4208966)