Bitcoin-Related Stocks Continue to Decline
Bitcoin and cryptocurrency stocks saw another drop on Monday, extending a downward trend that’s been going on for almost two months. This follows a broader decline in technology stocks, many of which are viewed as potentially overvalued.
Bitcoin dipped nearly 12% at one point before finalizing at just over $85,000, marking a 5.6% loss on the day. Overall, it’s down about 33% since reaching an all-time high of $126,210.50 on October 6, according to Coinbase. Bitcoin had surged alongside the stock market since April, fueled partly by a more favorable regulatory climate from Washington state.
A significant number of firms focused on cryptocurrency trading or investment reported losses due to Monday’s selloff. Coinbase Global dropped 4.8%, while Robinhood Markets fell 4.1%. Riot Platforms, a Bitcoin mining company, decreased by 4% as well.
Strategy, the largest crypto treasury firm, which raises funds specifically to buy Bitcoin, experienced a 3.3% decline. It currently holds around 649,870 Bitcoins, valued at roughly $55.7 billion as of 4 p.m. ET on Monday. Earlier, Strategy had adjusted its year-end price prediction for Bitcoin down to a range between $85,000 and $110,000, a significant decrease from its earlier October estimation of $150,000.
Bitcoin’s value in the U.S., which is owned partly by Eric Trump and Donald Trump Jr., has plunged 15.6%, and it’s now down nearly 47% since September 30.
Similarly, other cryptocurrency ventures tied to the Trump family have also seen declines. The market value of World Liberty Financial Token ($WLFI) dropped from over $6 billion in mid-September to around $4.14 billion. Additionally, the meme coin $TRUMP, associated with Donald Trump, is trading at $5.70, down from $45 just before the inauguration in January.
A popular way to invest in Bitcoin is through a spot Bitcoin ETF, which allows ownership of Bitcoin shares without the need to hold the actual cryptocurrency. November saw a staggering $3.6 billion pulled from the Spot Bitcoin ETF, marking the largest monthly withdrawal since its inception in January 2024, according to Morningstar Direct.
In the past month, Bitcoin futures have dropped nearly 24%, contrasting with gold futures, which have risen about 7%.
Analysts attribute the Bitcoin decline to several factors, including a general risk-off sentiment that’s gripped the markets this fall, prompting a shift towards safer investments like bonds and gold. A recent note from Deutsche Bank analysts pointed to institutional investor selling, profit-taking by long-term holders, and a more aggressive stance from the Federal Reserve as reasons for the downturn. They also mentioned that the ongoing uncertainty in crypto regulation has compounded the issue.
“The volatility is certainly a factor, but these conditions are making it difficult to determine if we’re facing a short-term correction or something more lasting,” they suggested.
On the regulatory side, there was a small boost when President Trump signed a bill in July introducing some initial protections for stablecoins, which are tied to assets like the U.S. dollar to help reduce volatility. However, efforts to create an overarching market structure for cryptocurrencies have stalled in the Senate, despite being a priority for the crypto industry, which invested significantly to support Trump and his allies in Washington.
