Reasons for 'blowing away' more than $1,000 billion from the cryptocurrency market

Photo caption — Bitcoin cryptocurrency. Photo: Getty Images/TTXVN

According to data firm CoinGecko, the value of the global cryptocurrency market has fallen 25% from its peak in early October. Over the same period, bitcoin - the largest cryptocurrency by market capitalization, which hit an all-time high of $126,251 on October 6 - has fallen 27% to $91,212 per bitcoin, its lowest level since April 2025. On November 17, bitcoin even slipped below $90,000 for the first time in seven months. The currency recovered slightly to around $91,800 in the November 20 session, but this level is still 2.4% lower than at the beginning of 2025.

Catalysts

Nic Puckrin, CEO of bitcoin trading site Coin Bureau, said there were multiple catalysts for the recent price drop. But the main factors include long-term selling by large, long-time bitcoin holders, along with an uncertain economic environment. A major turning point for the cryptocurrency market occurred on October 10, when a sell-off of more than $19 billion in trading orders wiped out more than $1 trillion in market value from all cryptocurrencies.

Analysts also worry that as cryptocurrencies become more closely linked to traditional financial markets, the associated risks will increase volatility for both crypto assets and the stock market. Puckrin also said that bitcoin is increasingly affected by macroeconomic developments.

Sharing the above view, Mr. Edward Carroll, head of institutional trading at digital asset platform MHC Digital Group, commented that the bitcoin sell-off is not "a story of cryptocurrencies alone" but reflects the global financial system.

With the market expecting fewer Fed rate cuts, the “cheap money” argument that supports bitcoin in the short term is no longer valid. This argument is based on the idea that when interest rates are low, investors tend to seek riskier assets (like cryptocurrencies, tech stocks) in search of high returns, rather than putting their money in safe but low-yielding channels. At the same time, “cheap money” – or low borrowing costs – can also make traders willing to use borrowed money to invest in these volatile assets.

Observers note that macroeconomic uncertainties are pushing bitcoin prices lower, especially as the probability of a Fed rate cut in December has dropped from nearly 70% in early November to around 50%. Persistently high inflation, mixed signals from the labor market and a lack of economic data after the 43-day US government shutdown are making the central bank more cautious.

Seeing opportunity amid difficulty

Despite the paper losses, data shows that large bitcoin holders are taking the opportunity to buy more. In the case of digital asset accumulation firm Bitcoin Strategy, it bought 8,178 bitcoins for $835.6 million, or about $102,171 per bitcoin.

Carroll said that the decline in bitcoin is not due to a breakdown in crypto market fundamentals, but reflects tight funding conditions and changing interest rate expectations. He said institutional investors will see more opportunities at low bitcoin prices and expect the digital asset to recover before the liquidity cycle changes, as it has after every major intervention in the past decade.

Also bullish on cryptocurrencies is Vetle Lunde, head of research at market research firm K33, who points to growing institutional adoption of cryptocurrencies. He predicts bitcoin will bottom at $84,000 to $86,000 before recovering. Coin Bureau's Puckrin also predicts bitcoin won't fall much below current levels, as the asset class has always been stronger after each correction cycle.

Source: https://baotintuc.vn/thi-truong-tien-te/nhung-ly-do-thoi-bay-hon-1000-ty-usd-khoi-thi-truong-tien-dien-tu-20251121135022899.htm