Crypto Fear & Greed Index hits record low despite ongoing institutional push into DeFi

The Crypto Fear and Greed Index dropped to a record low of 5 on February 12th, signaling extremely negative market sentiment. This index aggregates factors like volatility, momentum, and social media activity into a score from 0 (extreme fear) to 100 (extreme greed).

The prolonged negative sentiment is largely attributed to the massive liquidation event on October 10, 2025 ("10/10"), which saw over $19 billion in leveraged positions closed due to structural vulnerabilities in derivatives markets. This event caused Bitcoin to drop about 14% and altcoins to fall much harder, and sentiment has not recovered since.

This extreme fear contrasts sharply with ongoing institutional engagement, as major players like BlackRock and Citadel continue to deepen their involvement in DeFi and tokenization projects. This divergence suggests retail sentiment and institutional conviction are currently operating on different timelines.

(Source：The Block)