Bitcoin and companies tied to cryptocurrencies extended a nearly two-month swoon, tracking with a broader market sell-off in American technology companies that many see as overvalued.
Bitcoin slid 5.6% after being down nearly 12% earlier in the day, settling in just above US$85,000 (NZ$148,000).
The most-traded cryptocurrency is down about 33% since hitting a record US$126,210.50 (NZ$220,391) on October 6, according to crypto trading platform Coinbase.
Bitcoin had soared since April in line with the stock market and driven partly by a more crypto-friendly tone in Washington.
Companies that enable investors to buy and sell cryptocurrencies, as well as the growing number of companies that have made investing in bitcoin their main business focus, were hammered in today's sell-off.
Coinbase Global fell 4.8% and online trading platform Robinhood Markets lost 4.1%.
Bitcoin mining company Riot Platforms dropped 4%.
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Strategy, the biggest of the so-called crypto treasury companies that raises money just to buy bitcoin, fell 3.3%. The company has reported holding 649,870 bitcoin.
As of 4pm Monday (New York time, 9am Tuesday NZ time), they were worth about US$55.7 billion.
Earlier, Strategy said it expects bitcoin to end the year between US$85,000 and US$110,000 (NZ$192,000), down from an October forecast of US$150,000 (NZ$262,000).
American Bitcoin, in which US president Donald Trump's sons Eric Trump and Donald Trump Jr. hold a stake, fell 15.6% and is now down nearly 47% since Sept. 30.
Other Trump-related crypto ventures have seen declines as well.
The market value for the World Liberty Financial token, or $WLFI, has fallen to about US$4.14 billion from above US$6 billion in mid-September, according to coinmarketcap.com
And the price of a meme coin named for President Donald Trump, $TRUMP, is US$5.70 (NZ$9.95), a fraction of the US$45 (NZ$79) asking price just before his inauguration in January.
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One popular way of investing in bitcoin is through spot bitcoin ETFs, or exchange-traded funds, which allow investors to have a stake in bitcoin without directly owning the cryptocurrency.
According to data from Morningstar Direct, investors pulled US$3.6 billion out of spot bitcoin ETFs in November, the largest monthly outflow since the ETFs began trading in January 2024.
Bitcoin futures are down nearly 24% in the past month. At the same time, gold futures are up almost 7%.
Analysts point to a number of factors that have led to the sell-off in bitcoin and other crypto investments, including a broad risk-off sentiment that has gripped markets this fall, sending investors toward safer havens such as bonds and gold.
In a research note to clients last week, Deutsche Bank analysts also attributed the recent declines in crypto to institutional selling, other long-term holders collecting profits and a more hawkish Federal Reserve. Stalled crypto regulation has also contributed to the uncertainty, Deutsche Bank said.
“While volatility remains inherent, these conditions indicate Bitcoin’s portfolio integration is being tested, and raises questions of whether this is a temporary correction or a more prolonged adjustment,” the analysts wrote.
On the regulatory front, the crypto industry received a boost in July when Trump signed into law regulations that set initial guardrails and consumer protections for stablecoins, which are tied to assets like the US dollar to reduce price volatility compared with other forms of cryptocurrency.
But a bill that creates a new market structure for cryptocurrency remains stalled in the Senate.
The bill has been a top priority for the crypto industry since it spent heavily to elect Trump and install other allies in Washington.
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