Bitcoin and cryptocurrency-related companies extended a nearly two-month swoon on Monday, followed by a broader market sell-off in technology companies that many view as overvalued.
Bitcoin slipped 5.6% after falling nearly 12% earlier in the day, settling just above $86,000. Early Tuesday, it was trading around $86,650.
The most-traded cryptocurrency is down about 33% since hitting a record high of $126,210.50 on Oct. 6, according to crypto trading platform Coinbase. Bitcoin has climbed since April in line with the stock market and partly thanks to a more crypto-friendly tone in Washington.
Companies that allow investors to buy and sell cryptocurrencies, as well as the growing number of companies that have made investing in bitcoin their primary business focus, were hit by Monday’s selloff.
Coinbase Global fell 4.8% and online trading platform Robinhood Markets lost 4.1%. Bitcoin mining company Riot Platforms fell 4%.
Strategy, the largest of the so-called crypto treasury companies that raises funds solely to buy bitcoin, fell 3.3%. The company reported holding 649,870 bitcoins. As of 4 p.m. Eastern on Monday, their value was around $55.7 billion. Earlier, Strategy said it expected bitcoin to end the year between $85,000 and $110,000, down from the Oct. 30 forecast of $150,000.
US Bitcoin, in which President Donald Trump’s sons Eric Trump and Donald Trump Jr. have a stake, has fallen 15.6% and is now down almost 47% since September 30.
Other Trump-related crypto projects have also declined. The market value of the World Liberty Financial token, or $WLFI, has fallen to about $4.14 billion, from more than $6 billion in mid-September, according to coinmarketcap.com. And the price of a meme coin named in honor of President Donald Trump, $TRUMP, is $5.70, a fraction of the $45 asking price just before his inauguration in January.
A popular way to invest in Bitcoin is through Bitcoin spot 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 withdrew $3.6 billion from Bitcoin spot ETFs in November, the largest monthly outflow since the ETFs began trading in January 2024.
Bitcoin futures have fallen nearly 24% over the past month. At the same time, gold futures are up almost 7%.
Analysts point to a number of factors that led to the selloff in bitcoin and other crypto investments, including a general sense of risk aversion that gripped markets this fall, pushing investors toward safer havens such as bonds and gold.
In a research note to clients last week, Deutsche Bank analysts also attributed the recent decline in cryptocurrencies to institutional selling, other long-term holders collecting profits and a more hawkish Federal Reserve. The regulatory blockade on crypto has also contributed to uncertainty, Deutsche Bank said.
“While volatility remains inherent, these conditions indicate that Bitcoin’s portfolio integration is being tested and raise the question of whether this is a temporary correction or a more prolonged adjustment,” the analysts wrote.
On the regulatory front, the crypto industry received a boost in July when Trump signed regulations that establish initial guardrails and consumer protections for stablecoins, which are tied to assets like the U.S. dollar to reduce price volatility compared to other forms of cryptocurrency.
But a bill creating a new market structure for cryptocurrencies remains blocked in the Senate. The bill is a top priority for the crypto industry because it spent a lot of money electing Trump and installing other allies in Washington.
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