Bitcoin News Today: Crypto's House of Cards Shaken by S&P's $2 Trillion Collapse

The S&P 500's $2 trillion reversal in late 2025 has reignited volatility in the cryptocurrency market, as leveraged traders and institutional outflows collide with fragile liquidity. The benchmark index fell 1.2% on Nov. 17, extending a broader selloff that has erased $2 trillion in market value since October. This downturn has spilled into crypto, where Bitcoin and Ethereum have swung wildly, triggering over $1 billion in liquidations in a single day. The interplay between traditional markets and digital assets is now more intertwined than ever, with macroeconomic shifts and speculative trading amplifying crypto's inherent instability.

The recent turmoil began with a record $19.2 billion liquidation event on Oct. 10, which sent Bitcoin below $20,000 for the first time in years. Traders have since been doubling down on high-leverage bets, with positions of 20x to 100x not uncommon. A notable case involved a pseudonymous trader who lost $168 million after shorting crypto at the bottom of the plunge, only to reinvest the proceeds in new leveraged positions. These aggressive tactics mirror the impulsive strategies that led to a $100 million loss earlier this year, underscoring the risks of overexposure in a market where a 2% price swing can trigger cascading liquidations.

The S&P 500's decline has compounded these risks. Tech stocks, which dominate both the index and the crypto sector, fell nearly 2% on Nov. 17, with the Nasdaq and Dow Jones Industrial Average also in negative territory. This broad-based weakness has rattled investors, many of whom had poured into crypto during the AI-driven rally earlier in the year. Now, as AI's spotlight shifts to tariffs and economic uncertainty, crypto's liquidity has evaporated, exacerbating price swings.

For example, Ethereum briefly dipped below $3,000, while Bitcoin retreated to $87,000 before recovering to $91,000.

Institutional outflows have further strained the market. Crypto funds saw $1.2 billion in redemptions in early November, according to The Kobeissi Letter. These withdrawals, combined with leveraged trading, have created a self-reinforcing cycle of selling. "The crypto market is structurally fragile," the research firm noted, adding that the sector has lost $1.2 trillion in value since late October. This decline has been amplified by thinning liquidity, where even modest trades can move prices dramatically.

The volatility has also drawn attention to companies holding large crypto treasuries. BitMine Immersion (BMNR), for instance, disclosed ETH holdings of 3.6 million tokens, making it the largest Ethereum treasury globally. Meanwhile, FG Nexus reported $37 million in cash and USDC reserves alongside 40,050 ETH, as it continues a $200 million share buyback program. These firms, however, face scrutiny as MSCI considers excluding Bitcoin-focused companies from its indices.

Despite the chaos, some see opportunity. The Crypto Fear & Greed Index hit an extreme fear level of 10, matching February lows, yet Bitcoin has gained 25% from its April bottom. Gold, meanwhile, has outperformed crypto by 25 percentage points since October, highlighting a shift toward traditional safe havens.

As the market grapples with these dynamics, the coming months will test whether crypto can stabilize or if further turbulence lies ahead. For now, the S&P 500's reversal has exposed the fragility of a market still learning to navigate macroeconomic forces and its own speculative excesses.