Since peaking between July and October 2025, the prices of cryptocurrencies have been falling sharply. Since January 1, 2025, even the best performing digital currency, Bitcoin (BTC), is down by around 26% as of February 12, 2026. The worst performer among them, Cardano (ADA), has fallen by more than 70% (Figure 1).

What’s surprising about the selloff is the macroeconomic context. Investors often casually assume that crypto assets are (or at least should be):

1. Positively correlated with precious metals

2. Negatively correlated with the U.S. dollar (USD)

3. Positively correlated with technology stocks.

As we will see, the truth behind these…