Bitcoin (BTC) faced its sharpest monthly decline since the 2022 crypto winter, dropping approximately 25% in November as a confluence of forced selling, institutional outflows, and deteriorating market sentiment overwhelmed the bullish narrative that followed Donald Trump’s election victory. By Friday, the cryptocurrency traded at $80,659.81 after falling more than 10% in the session, pulling the entire digital-asset market below the $3 trillion mark for the first time since April.
The speed of the reversal has been striking. Bitcoin had surged to a record high in early October, pushing its year-to-date gain above 100% amid expectations of a more favorable regulatory environment under the incoming administration and continued institutional accumulation. Yet the subsequent 30% drawdown from that peak has erased roughly $1.5 trillion from the aggregate cryptocurrency market capitalization, with Ether (ETH) declining 9.93% to $2,725.86 and most alternative tokens posting comparable losses.
Liquidations have played a central role in amplifying the downturn. An initial wave on October 10 wiped out $19 billion in leveraged positions, and another $2 billion was liquidated in the past 24 hours alone, according to CoinGlass data. Open interest in perpetual futures contracts has contracted 35% from the October high of $94 billion, reflecting a broad reduction in speculative exposure.
Institutional participation, previously a key pillar of support, has shifted decisively toward the exits. The twelve U.S.-listed spot Bitcoin exchange-traded funds recorded $903 million in net outflows on Thursday, marking the second-largest single-day redemption since their launch in January 2024. Investor sentiment gauges have concurrently plunged, with the Coinglass fear-and-greed index now signaling extreme fear – the lowest reading since the 2022 bear market – compared to a level of 94 immediately following the presidential election.
Contributing to the supply overhang, a wallet identified as “Owen Gunden” that had held Bitcoin continuously since 2011 completed the sale of its remaining holdings on Thursday, having offloaded a total of $1.3 billion worth of the asset since late October, according to blockchain intelligence firm Arkham Intelligence.
The pressure has extended beyond Bitcoin itself to companies that adopted aggressive accumulation strategies. Michael Saylor’s Strategy Inc. (MSTR), the most prominent corporate holder, saw its shares close 5.02% lower to $177.13 on Thursday, driving its market-value-to-NAV ratio down to slightly above 1.2. Analysts have noted that further price weakness could push the company closer to the average acquisition cost of its holdings, potentially triggering margin calls on its debt-financed positions. JPMorgan Chase & Co. (JPM) highlighted in a recent report that Strategy risks exclusion from major benchmarks such as the MSCI USA and Nasdaq 100, with a decision expected by January 15.Several firms that sought to emulate Strategy’s approach this year are now retrenching as well. Sequans Communications, ETHZilla, and FG Nexus have begun liquidating portions of their cryptocurrency treasuries to finance share repurchase programs intended to stabilize their falling stock prices.
Broader financial markets provided little cushion, as U.S. equities relinquished recent gains driven by Nvidia Corp. (NVDA) earnings amid renewed concern over elevated valuations and diminishing odds of a Federal Reserve rate reduction in December. Portfolio managers report evidence of forced selling across the sector, with the depth and duration of the current move still uncertain.
