Topline
Bitcoin’s slump extended Monday, as the world’s largest cryptocurrency pulls back further from last week’s all-time high, though it’s still a banner year for bitcoin investors.
Bitcoin has struggled since the Fed indicated rates are likely to stay higher for longer.
Key Facts
Bitcoin fell 2% to just below $93,000 by 8 p.m. Greenwich Mean Time, or 3 p.m. EST (price movements for the constantly traded crypto token are most commonly referenced in GMT).
The digital asset is on track for its lowest end-of-day price since Nov. 27.
Bitcoin is down 14% from its record of more than $108,000 set last Tuesday, sending it into correction territory for the first time in four months.
Stocks of publicly traded crypto companies also struggled Monday, with bitcoin whale MicroStrategy falling 8%, crypto exchange Coinbase sinking 5% and the most valuable bitcoin miner, Marathon Digital, dipping 4%.
All three of those stocks are down at least 20% from their peaks earlier this month.
Big Number
$500 billion. That’s roughly how much the aggregate market capitalization of all cryptocurrencies is down from last Monday’s record $3.9 trillion, according to CoinGecko. Bitcoin accounts for about 56% of the overall crypto market with a market cap of $1.9 trillion.
Why Is Bitcoin Down?
The recent selloff coincides with losses across risk-forward financial assets, including stocks, as the S&P 500 is down 2% over the last week. Catalyzing the declines was Wednesday’s Federal Reserve meeting, in which the U.S. central bank indicated more heightened concerns about lingering inflation and forecasted fewer 2025 interest rate cuts than previously projected. That’s bad news for riskier assets, like crypto, as investors tend to keep money in high-returning, low-risk government bonds when interest rates are higher. “Monetary easing has almost always favored the price of bitcoin, and the opposite has a negative impact on the price,” Yuya Hasegawa, crypto market analyst at Japanese crypto exchange bitbank, wrote in emailed comments Monday.
Contra
Eyebrow-raising corrections are also very common for bitcoin, which endured a more than 20% selloff this summer and a more than 70% one from 2021 to 2022 prior to its all-time high set this month. Bitcoin remains up massively in 2024, gaining 120% year-to-date, up 36% since the election, which returned newfound crypto bull Donald Trump to Washington. Other assets which surged have similarly taken a breather, including Tesla stock, which is down 12% from its record high set last week but trades more than 70% higher than it did prior to the election.
