Bitcoin and cryptocurrency-related companies experienced a severe sell-off, extending a two-month decline. Bitcoin slid to just above $86,000, down 33% from its October peak. Major crypto firms, including those tied to Donald Trump, saw significant losses, while spot Bitcoin ETFs recorded massive outflows. Analysts attribute the downturn to a broad 'risk-off' market sentiment, institutional selling, a hawkish Fed, and regulatory uncertainties.
Bitcoin and associated cryptocurrency companies extended a nearly two-month decline on Monday, mirroring a broader tech market sell-off. Bitcoin plummeted 5.6% to just over $86,000, marking a 33% drop from its record high of $126,210.50 on October 6. This downturn impacted major players like Coinbase Global (-4.8%), Robinhood Markets (-4.1%), and Bitcoin mining company Riot Platforms (-4%). Strategy, a significant crypto treasury company holding 649,870 bitcoin worth approximately $55.7 billion, saw its shares fall 3.3% and revised its year-end Bitcoin forecast downwards from $150,000 to $85,000-$110,000. Even Trump-related crypto ventures suffered substantial losses, with American Bitcoin, in which Eric Trump and Donald Trump Jr. hold stakes, falling 15.6%. The market value for the World Liberty Financial token ($WLFI) dropped to $4.14 billion from over $6 billion in mid-September, and the $TRUMP meme coin is now trading at $5.70, a fraction of its pre-inauguration price of $45. Investment vehicles also felt the impact, as spot Bitcoin ETFs experienced $3.6 billion in outflows in November, the largest since their January 2024 launch. Bitcoin futures are down nearly 24% in the past month, contrasting sharply with gold futures, which are up almost 7%. Analysts point to several factors for the crypto market's woes, including a pervasive 'risk-off' sentiment pushing investors towards safer assets like bonds and gold. Deutsche Bank highlighted institutional selling, long-term holders taking profits, a more hawkish Federal Reserve, and stalled crypto regulation as key contributors. While the industry received a boost in July with Trump signing stablecoin regulations, a crucial bill for a new cryptocurrency market structure remains stalled in the Senate, adding to market uncertainty.
