Bitcoin News Today: Crypto's Selloff: Cyclical Downturn or Structural Shift in Asset Allocation?

The cryptocurrency market experienced a sharp selloff in late November and early December 2025, with Bitcoin (BTC) and major altcoins plummeting amid macroeconomic turbulence, while U.S. equities showed resilience. This divergence, fueled by shifting liquidity dynamics and institutional strategies, left investors grappling with the sector's heightened volatility.

Bitcoin's price dropped nearly 36% from its October peak, hitting $85,461 on December 1, as global markets reacted to the Bank of Japan's (BOJ) signals of a potential rate hike. The central bank's comments pushed Japan's 2-year bond yield to 1.84%, its highest since 2008, triggering a wave of liquidations across crypto assets. Over $637 million in positions were wiped out in 24 hours, with Bitcoin alone losing $200 million in long positions according to reports. The yen carry trade-where investors borrowed cheap yen to invest in higher-yielding assets-became a focal point of risk-off sentiment, accelerating the sell-off as hedgers unwound leveraged bets.

The selloff extended to altcoins, with Ethereum (ETH) falling 8% to $2,807, Solana (SOL) dropping 9.6%, and XRP shedding 9.2% according to market data. Analysts attributed the broader market stress to shallow liquidity and algorithmic trading resets coinciding with the new year, month, and week as reported. "The pressure across markets intensified because the order book was shallow and the market lacked sufficient depth to withstand another macroeconomic liquidity shock," said Farzam Ehsani of VALR according to market analysis.

Institutional players also reshaped the landscape. MicroStrategy (MSTR), the largest corporate Bitcoin holder, moved 58,390 BTC to Fidelity Custody, a move framed as diversification rather than a sale. Meanwhile, ETF flows underscored a strategic shift away from Bitcoin. Spot Bitcoin ETFs recorded $151 million in outflows on November 24, extending a $3.79 billion monthly exodus according to market reports. BlackRock's iShares Bitcoin Trust (IBIT) led redemptions, while Ethereum, Solana, and XRP ETFs absorbed $318 million in inflows, signaling a pivot toward altcoins with yield-generating potential.

CoinShares, preparing for its U.S. public listing, highlighted the need for innovation in a commoditized single-coin ETP market. The firm emphasized products like the Bitcoin Miners ETF (WGMI), which amassed $250 million in assets under management, as evidence of demand for specialized exposure. This aligns with broader trends of institutional capital seeking differentiated returns amid Bitcoin's bearish phase.

Despite the turmoil, some analysts see a potential rebound. BTIG's Jonathan Krinsky noted that Bitcoin's oversold conditions and historical seasonal patterns could push prices toward $100,000. However, the path remains uncertain, with JPMorgan warning that indices like the MSCI USA could delist companies with crypto-heavy treasuries, adding regulatory headwinds.

The market's divergence between crypto and equities reflects a recalibration of risk appetite. While U.S. stocks rebounded on hopes of a Fed rate cut, crypto's high-beta nature left it vulnerable to macro shocks. As liquidity constraints persist and institutional strategies evolve, the sector faces a critical juncture: whether this selloff marks a cyclical correction or a structural shift in asset allocation.