Bitcoin and Related Companies Face Declines
Bitcoin and companies tied to cryptocurrencies extended a nearly two-month swoon Monday, tracking with a broader market sell-off in technology companies that many see as overvalued.
Bitcoin slid 5.6% after being down nearly 12% earlier in the day, settling in just above $85,000. The most-traded cryptocurrency is down about 33% since hitting a record $126,210.50 on Oct. 6, according to crypto trading platform Coinbase. Bitcoin had soared since April in line with the stock market and driven partly by a more crypto-friendly tone in Washington.
Impact on Cryptocurrency-Focused Businesses
Companies that enable investors to buy and sell cryptocurrencies, as well as the growing number of companies who have made investing in bitcoin their main business focus, were hammered in Monday’s sell-off.
Coinbase Global fell 4.8% and online trading platform Robinhood Markets lost 4.1%. Bitcoin mining company Riot Platforms dropped 4%.
Treasury and Investment Company Performance
Strategy, the biggest of the so-called crypto treasury companies that raises money just to buy bitcoin, fell 3.3%. The company has reported holding 649,870 bitcoin. As of 4 p.m. ET Monday they were worth about $55.7 billion. Earlier, Strategy said it expects bitcoin to end the year between $85,000 and $110,000, down from an Oct. 30 forecast of $150,000.
American Bitcoin, in which President Donald Trump’s sons Eric Trump and Donald Trump Jr. hold a stake, fell 15.6% and is now down nearly 47% since Sept. 30.
Declines in Trump-Related Crypto Ventures
Other Trump-related crypto ventures have seen declines as well. The market value for the World Liberty Financial token, or $WLFI, has fallen to about $4.14 billion from above $6 billion in mid-September, according to coinmarketcap.com And the price of a meme coin named for President Donald Trump, $TRUMP, is $5.70, a fraction of the $45 asking price just before his inauguration in January.
Investor Outflows from Spot Bitcoin ETFs
One popular way of investing in bitcoin is through spot bitcoin ETFs, or exchange-traded funds, which allow investors to have a stake in bitcoin without directly owning the cryptocurrency. According to data from Morningstar Direct, investors pulled $3.6 billion out of spot bitcoin ETFs in November, the largest monthly outflow since the ETFs began trading in January 2024.
Market Trends and Analyst Perspectives
Bitcoin futures are down nearly 24% in the past month. At the same time, gold futures are up almost 7%.
Analysts point to a number of factors that have led to the sell-off in bitcoin and other crypto investments, including a broad risk-off sentiment that has gripped markets this fall, sending investors toward safer havens such as bonds and gold.
In a research note to clients last week, Deutsche Bank analysts also attributed the recent declines in crypto to institutional selling, other long-term holders collecting profits and a more hawkish Federal Reserve. Stalled crypto regulation has also contributed to the uncertainty, Deutsche Bank said.
“While volatility remains inherent, these conditions indicate Bitcoin’s portfolio integration is being tested, and raises questions of whether this is a temporary correction or a more prolonged adjustment,” the analysts wrote.
Regulatory Landscape for Cryptocurrencies
On the regulatory front, the crypto industry received a boost in July when Trump signed into law regulations that set initial guardrails and consumer protections for stablecoins, which are tied to assets like the U.S. dollar to reduce price volatility compared with other forms of cryptocurrency.
But a bill that creates a new market structure for cryptocurrency remains stalled in the Senate. The bill has been a top priority for the crypto industry since it spent heavily to elect Trump and install other allies in Washington.