Crypto Market Takes a Big Hit: Bitcoin Drops Below $85, 000
The world of cryptocurrency has experienced a significant downturn recently. Bitcoin, the most popular digital currency, briefly dropped below $85,000. This isn't just a minor dip—it's part of a broader trend that has been ongoing for nearly two months. Other tech companies have also seen their values decline, potentially due to overvaluation concerns.
Impact on Crypto-Related Companies
- Coinbase: The cryptocurrency trading platform saw a 4.8% drop.
- Robinhood: Another trading platform lost 4.1% of its value.
- Riot Platforms: A bitcoin mining company dropped by 4%.
- Strategy: A company heavily invested in bitcoin, fell by 3.3%. They own 649,870 coins, worth around $55.7 billion at the time. Earlier predictions suggested bitcoin could reach $150,000, but recent forecasts have been revised to $85,000–$110,000 by year-end.
Trump-Related Crypto Ventures
- American Bitcoin: Where Trump's sons hold stakes, fell by 15.6%, now nearly 47% lower than at the end of September.
- Other Trump-linked crypto projects also saw significant declines.
Bitcoin ETF Outflows
Investors are pulling money out of bitcoin ETFs—funds that allow betting on bitcoin without direct ownership. In November, $3.6 billion was withdrawn, the highest since these ETFs began trading in January 2024.
Reasons Behind the Decline
Experts attribute the drop to several factors:
- Investor uncertainty leading to safer investments like bonds and gold.
- Big investors selling their crypto holdings.
- Federal Reserve policies impacting market sentiment.
- Lack of clear crypto regulations, adding to market instability.
A Glimmer of Hope
In July, Trump signed a law regulating stablecoins—a type of crypto tied to assets like the U.S. dollar. However, a larger bill aimed at creating a new market structure for crypto remains stuck in the Senate. This bill is crucial for the crypto industry, which has heavily supported Trump and his allies.
