Cryptocurrencies Plunge Amid Broad Flight From Risk Assets
By Rae Wee | November 21, 2025
SINGAPORE – Cryptocurrencies experienced a sharp decline on Friday, dragged down by a widespread investor retreat from risk assets. Bitcoin and ether, the top two digital currencies by market value, dropped to multi-month lows as concerns intensified over inflated technology sector valuations and diminishing expectations for near-term interest rate cuts by the U.S. Federal Reserve.
Bitcoin, the world’s largest cryptocurrency, fell 2.1% to a seven-month low, sliding below the $86,000 mark to trade at $85,350.75 during Asian trading hours. Ether also declined more than 2%, hitting a four-month trough at $2,777.39. Both cryptocurrencies were on track to register weekly losses of approximately 8%.
Cryptocurrencies are often viewed by investors as indicators of market risk appetite. The recent steep declines signal increasing fragility in market sentiment, compounded by tumbling artificial intelligence stocks and a spike in overall volatility — underscored by a rising VIX index.
Tony Sycamore, a market analyst at IG, highlighted the unsettling risk sentiment reflected in bitcoin’s fall, warning that “things could start to get really, really ugly” if the trend continues.
The total market capitalization of all cryptocurrencies has declined by roughly $1.2 trillion over the past six weeks, according to crypto market tracker CoinGecko. This downturn has also hit newly launched Hong Kong-listed spot bitcoin ETFs hard, with funds from China AMC, Harvest, and Bosera each losing close to 7% on Friday.
From Record Highs to Sharp Declines
The rapid drop in bitcoin follows a remarkable rally earlier this year that pushed the digital currency above $120,000 in October, a record high propelled by favorable global regulatory developments for crypto assets. However, a historic crypto crash last month severely rattled the market; panic selling combined with low liquidity triggered more than $19 billion in liquidations of leveraged positions, intensifying price volatility.
Sycamore described the current market landscape as “dislocated, fractured, a bit broken” since that selloff. Year-to-date, bitcoin has not only erased its previous gains but now stands down 8% for the year, while ether’s losses are close to 16%.
The fallout extends to companies that have integrated cryptocurrencies into their corporate treasuries. Shares of Strategy (MSTR.O), one of the most prominent corporate bitcoin holders, dropped 11% this week, hitting levels not seen in over a year. Similarly, Japanese digital asset company Metaplanet (3350.T) has plummeted approximately 80% from its June peak.
Bearish Outlook for Crypto Market
Digital asset research firm CryptoQuant, in its latest weekly report, described the current bitcoin market conditions as “the most bearish they have been since the current bull cycle started in January 2023.” The firm suggested that the bulk of demand in this cycle may have already been exhausted, casting doubt on near-term upward momentum.
Investors’ cautious stance is further influenced by tightening Federal Reserve policy expectations. The fading prospects for rate cuts are weighing on riskier assets, including cryptocurrencies, as investors pivot toward safer investments amid uncertainty on inflation and economic growth.
As the crypto market wrestles with the aftermath of recent crashes and evolving macroeconomic factors, analysts emphasize volatility and risk remain elevated, underscoring the fragile sentiment enveloping the space.
Reporting by Rae Wee; Editing by Kevin Buckland
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