Cryptocurrency markets took a sharp tumble to start December 2025, with Bitcoin dropping nearly 5–7% in a single day — its steepest single-day fall in over a month. Reuters+2Business Insider+2 As of early trading, Bitcoin traded around $86,754, down from its October peak near $126,000. Yahoo Finance+3Reuters+3Business Insider+3
The slide wiped out roughly $1 billion in leveraged crypto positions, amplifying the downturn. Bloomberg+2CoinDesk+2 Ethereum and other major tokens dropped too — with Ether down around 6–7%, and alternative coins suffering even steeper losses. Reuters+2Business Insider+2
Market watchers point to a mix of factors driving the rout. Risk-off sentiment has surged as broader financial markets falter, while liquidity in crypto markets appears drained after heavy November outflows from spot Bitcoin ETFs (reportedly over $3.5 billion). Business Insider+2AP News+2 Meanwhile, growing correlation between crypto and traditional equities has dented Bitcoin’s appeal as a hedge. Reuters+1
Perhaps most concerning for many investors: this drop defies seasonal expectations. Historically, December tends to be bullish for Bitcoin — but this year, analysts warn fragile macro conditions, waning ETF inflows, and a surge in liquidations may tilt crypto toward a more protracted downturn. Nasdaq+2Business Insider+2
The fallout is already visible beyond just prices. Crypto-linked equities — including trading platforms, miners, and ETFs — are reeling. Stocks like Coinbase Global, Riot Platforms, and MicroStrategy saw 3–5% pre-market drops, compounding investor jitters across the crypto ecosystem. Reuters+2AP News+2
The rapid descent raises a crucial question: can crypto recover this winter, or is a deeper correction under way? For now, traders and institutions are watching macro signals — interest-rate outlooks, liquidity, and investor risk appetite — for clues.