Bitcoin’s $85K Slide Causes Market Jitters as Tech Sell-Off Deepens

As investors withdraw billions from ETFs, big businesses lose value, and regulatory uncertainty creates additional pressure, cryptocurrency markets plummet for a second month.

On Monday, Bitcoin and cryptocurrency-related businesses continued their nearly two-month decline, reflecting a broader tech sell-off that many believe is past due. Bitcoin slumped 5.6% - after losing almost 12% earlier – maintaining just around $85,000. According to Coinbase, the cryptocurrency is currently down almost 33% from its peak of $126,210.50 on October 6. The drop comes after a months-long spike driven by an improving stock market and more lenient U.S. regulations. Companies offering crypto trading services, along with firms highly engaged in bitcoin, were struck hard in Monday’s drop.

Robinhood sank 4.1%, Coinbase fell 4.8%, and Riot Platforms, a Bitcoin miner, fell 4%. Strategy, a significant cryptocurrency treasury company with 649,870 bitcoin valued at roughly $55.7 billion, saw a 3.3% fall and lowered its year-end bitcoin prediction from $150,000 to $85,000–$110,000. Since September 30, American Bitcoin, which is partially owned by Eric and Donald Trump Jr., has dropped 15.6% and is currently down about 47%.

Other Trump-linked crypto projects are also dropping. According to coinmarketcap.com, the market value of the World Liberty Financial token ($WLFI) has decreased from over $6 billion in mid-September to roughly $4.14 billion. The Trump-themed meme coin ($TRUMP) now trades at $5.70 – much below its $45 price just before his inauguration.

Meanwhile, spot bitcoin ETFs are suffering huge pullbacks. Morningstar Direct data shows investors withdrew $3.6 billion from these products in November, marking the highest monthly outflow since their inception in January 2024.

Bitcoin futures have plummeted about 24% over the past month, while gold futures are up roughly 7%, as investors migrate toward safer assets amid a larger risk-off market. Long-term investors' profit-taking, institutional selling, and a more hawkish Federal Reserve are cited by analysts as the main causes of the cryptocurrency sell-off. Bitcoin's volatility is challenging its position in investor portfolios, according to Deutsche Bank, raising concerns about whether this is a short-term correction or a longer-term reset.

On the regulatory front, the industry experienced success in July when Trump approved new laws creating guardrails for stablecoins. However, a crucial law to describe the larger crypto market structure remains blocked in the Senate – postponing the clarity the industry has been striving for after actively sponsoring pro-crypto candidates.