Risk-Off Return Hits Bitcoin and Crypto Equities
Bitcoin fell sharply Monday, tumbling from roughly $91,000 to $84,000, as renewed fears of a potential Japan rate hike sparked a global risk-off move. The concern: investors who’ve borrowed cheap yen to buy U.S. stocks and crypto could unwind those trades — a dynamic that caused an 18% Bitcoin drop during the August 2024 carry-trade reversal.
Analysts warn that volatility tends to cluster around these macro shifts.
But despite the near-term pressure, the broader backdrop still favors risk assets — especially as markets place a growing 80%+ probability on a December Fed rate cut.
Even so, sentiment across crypto markets remains fragile. Bitcoin ETFs posted $3.5 billion in outflows in November — their second-worst month on record — and the token now sits more than 30% below its October all-time high above $126,000.
Research houses including 10X and Bernstein say they’re still watching for clearer signs of a bottom before calling a new upside trend.
Crypto Stocks Under Pressure as Sentiment Bleeds Across the Sector
With token prices sliding, crypto-linked equities were hit even harder:
- Coinbase (COIN): –20%
- Circle (CRCL): –38%
- Robinhood (HOOD): –16%
- Strategy (MSTR): –40%
Strategy — the largest public holder of Bitcoin — faced additional pressure on concerns it may need to liquidate assets to meet dividend and interest obligations. The company attempted to calm markets by announcing a $1.44B USD reserve and reporting that it added 130 more BTC, bringing total holdings to 650,000 tokens.
Benchmark and Bernstein analysts called liquidation fears “overstated,” noting that Bitcoin would need to fall over 86% — below $12,700 — to threaten the company’s ability to cover debt.
Still, Strategy stock hit a 52-week low as the company projected a net income swing between –$5.5B and +$6.3B, underscoring the sector’s renewed volatility.
WSA Take
Crypto markets remain hypersensitive to macro catalysts — from yen carry trade dynamics to the timing of a Fed cut. Bitcoin’s drawdown only reinforces that investors are shifting toward structured exposure rather than high-beta speculation.
For crypto, the next durable leg up will likely depend on stability in global rates and renewed ETF inflows — not just narrative momentum.
Read our recent coverage on Goldman Sachs $2B in Push to Expand ETF Footprint.
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