Bitcoin Slides Below $85,000 as Crypto Market faces Sell-Off
NEW YORK (AP) – Bitcoin briefly fell below $85,000 Monday amid a broad sell-off in the cryptocurrency market, fueled by factors including institutional selling, profit-taking by long-term holders, and a more cautious stance from the Federal Reserve. The downturn comes as investors shift toward safer assets like bonds and gold.
MicroStrategy, a major corporate holder of bitcoin, reported holding 649,870 bitcoin, worth approximately $55.7 billion as of 4 p.m. ET Monday. Strategy previously forecast bitcoin to reach $85,000 to $110,000 by year-end, a downward revision from an Oct. 30 prediction of $150,000.
The crypto market rout extends to ventures linked to former President Donald Trump. American Bitcoin, in which Eric Trump and Donald Trump Jr. have a stake, dropped 15.6% and is down nearly 47% since Sept. 30. The World Liberty financial token ($WLFI) has seen its market value decline to about $4.14 billion from over $6 billion in mid-September,according to coinmarketcap.com. A meme coin named $TRUMP is trading at $5.70, substantially lower than its $45 price just before President Trump’s inauguration in January.
Investor sentiment has also cooled toward spot bitcoin ETFs, with $3.6 billion pulled from these funds in November-the largest monthly outflow since their January 2024 launch, according to Morningstar Direct. Bitcoin futures are down nearly 24% in the past month, while gold futures have risen almost 7%.
Deutsche Bank analysts attribute the declines to institutional selling, long-term holders taking profits, and a more hawkish Federal Reserve. They noted that stalled crypto regulation is also contributing to uncertainty, stating, “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.”
Despite the recent downturn, the crypto industry received a regulatory boost in July with Trump’s signing of legislation establishing initial guardrails and consumer protections for stablecoins. Though, a bill to create a new market structure for cryptocurrency remains stalled in the Senate, despite significant lobbying efforts by the industry to elect Trump and supportive allies.
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