In November 2025, Bitcoin underwent a sharp and sudden decline, dropping nearly 30% from its October high of $126,000 to below $90,000. This dramatic fall wiped out over $1 trillion in market value and was fueled by a combination of global economic pressures, shifting institutional attitudes, and underlying weaknesses within the cryptocurrency market. To fully grasp what led to this downturn and what it means for the future, it’s essential to examine the impact of worldwide monetary policy, institutional strategies, and Bitcoin’s changing place in investment portfolios.
The steep drop in Bitcoin’s value coincided with growing uncertainty about central bank actions, especially regarding the U.S. Federal Reserve’s approach to interest rate cuts. Although the Fed had hinted at easing monetary policy by the end of 2025, persistent inflation and ongoing geopolitical tensions made investors nervous about potential delays.
Reports from the New York Fed indicated that inflation expectations held steady at 3.7%. However, the lack of clear guidance on when rate cuts might occur led to a cautious mood across financial markets. This uncertainty sparked a broad selloff in riskier assets, with Bitcoin’s price closely tracking the downward movement of the S&P 500.
Meanwhile, the European Central Bank chose to keep its main interest rate at 2% in late November, as eurozone inflation hovered at 2.2%—just above its target. The ECB’s decision to pause on rate cuts, combined with ongoing trade policy uncertainties, added to the fragility of global markets. According to the ECB’s Financial Stability Review, the increasing links between traditional finance and crypto meant that policy changes in one region could quickly ripple across the world, amplifying systemic risks.
Large institutional investors, who had previously fueled Bitcoin’s surge earlier in 2025, played a significant role in the November downturn. By that month, Bitcoin ETFs—especially BlackRock’s iShares Bitcoin Trust (IBIT)—saw outflows totaling $3.79 billion, with IBIT alone accounting for $2.47 billion in redemptions. This represented one of the largest ETF withdrawals on record, signaling a move from aggressive buying to a more defensive stance.
The situation was made worse by forced liquidations in leveraged positions. As Bitcoin’s price tumbled, margin calls in futures markets triggered a cascade of additional selling. On-chain analytics showed that short-term holders offloaded large portions of their assets, while long-term investors largely held firm. This split revealed a breakdown in market confidence, with both retail and institutional players focusing on risk reduction rather than long-term faith in the asset.
The events of November highlighted Bitcoin’s growing tendency to move in tandem with mainstream financial assets. During the crash, Bitcoin’s price mirrored the S&P 500, with a correlation coefficient reaching about 0.90 by late November. This shift suggests that Bitcoin is increasingly viewed as a risk-on asset, especially during periods of economic uncertainty.
In contrast, gold surged by 55% during the same period, underscoring the weakness in Bitcoin’s reputation as “digital gold.” While gold maintained its role as a safe haven, Bitcoin’s simultaneous decline with equities pointed to its vulnerability to liquidity shortages and leveraged trading. Analysts attributed this to the influx of speculative capital, driven by excitement around AI and a surge in retail trading activity.
Blockchain metrics painted a bleak picture for Bitcoin’s underlying health during the selloff. The network’s hash rate—a key indicator of security—fell as miners struggled with shrinking profit margins, with hashprice dropping below $35 per PH/s, marking a new low. Miner revenues declined by 20.5% in November, and transaction volumes also shrank, signaling reduced activity on the network. These trends pointed to mounting stress on Bitcoin’s economic model, particularly for miners operating with slim margins.
Despite these headwinds, long-term holders either maintained or increased their positions, demonstrating continued belief in Bitcoin’s long-term potential. This resilience stood in stark contrast to the panic selling by short-term investors, suggesting a possible turning point for the market.
The November 2025 crash presents investors with a challenging dilemma. On one side, technical indicators pointed to oversold conditions, with Bitcoin testing crucial support near $90,000. Some institutional investors began cautiously buying again in late November, though at a slower pace, indicating a defensive approach.
On the other side, the selloff exposed deeper vulnerabilities within the crypto ecosystem, such as liquidity shortages and excessive reliance on leverage. For those with a long-term outlook, the price drop could be seen as a chance to acquire Bitcoin at lower valuations, especially given its increasing acceptance among institutions and clearer regulatory frameworks. However, Bitcoin’s stronger correlation with traditional markets means its future will likely remain closely linked to global economic cycles and central bank decisions.
Bitcoin’s dramatic decline in November 2025 marked a pivotal moment, revealing both its weaknesses and its evolving significance in the world of finance. While global economic pressures and institutional profit-taking triggered the fall, the steadfastness of long-term holders suggests that Bitcoin’s core appeal endures. For investors, the challenge lies in balancing short-term volatility with confidence in the asset’s long-term fundamentals, recognizing that Bitcoin’s journey toward mainstream acceptance is still unfolding.