On December 1, 2025, the crypto market awoke to a rude jolt, with Bitcoin plunging below $88,000 and erasing over $140 billion in market cap in mere hours. Ethereum and altcoins followed suit, down 5-7%, amid cascading liquidations and renewed fear.
Let’s unpack the “why” behind today’s turmoil while remembering: in crypto, every crash plants seeds for tomorrow’s bull run.
Crypto markets are no strangers to heart-stopping drops.
The epicenter of today’s crash were liquidations.
Over $700 million in leveraged positions of crypto derivatives were liquidated in hours, with nearly $400 million in long positions alone flushed out in the last 60 minutes.
Whales offloaded around $2.5 billion in Bitcoin across exchanges like Binance and Wintermute. X chatter highlighted this as a “leverage reset,” where overextended positions get culled to clear the deck.
Yet, here’s the silver lining: these purges often mark bottoms. Post-2022’s infamous crash, Bitcoin rallied 1,000% in 18 months. Today’s flush could similarly shake out weak hands, paving the way for stronger, more sustainable growth.
Crypto is increasingly tethered to traditional finance, and today’s drop screamed macro unease.
Japan’s 2-year bond yield surged above 1% for the first time since 2008, fueling bets on Bank of Japan (BOJ) tightening.
This rippled through Asia: the Nikkei plunged 3%, dragging risk assets like Bitcoin lower in a classic “risk-off” cascade. S&P 500 futures slipped, and global yields rose, pressuring high-beta assets like crypto that thrive on cheap money.
In other words: When Japanese government bonds start offering higher yields, they suddenly become more attractive compared to risky assets. Investors who were previously forced into risk (because yields were near zero) now have a safer way to earn returns. So money rotates toward Japanese Government Bonds and away from high beta assets like crypto.
The $119 million hack in Yearn Finance’s yETH pool shook confidence across the market.
Traders started unloading altcoins, and Ethereum slid hard in November, dropping 27 percent. If it breaks its next set of support levels, analysts think it could fall another 28 percent. Bitcoin wasn’t spared either, with chart watchers noting its weekly momentum turning negative around ninety one thousand.
Strategy Inc. (formerly MicroStrategy)’s valuation slipped. There is fear in the market that if it slips further, company would theoretically be forced to sell Bitcoin to maintain its dividend model, a scenario some users exaggerated into talk of a fifty eight billion BTC dump. Some see this very negatively in the light of the FTX collapse, which adds to the fear in the market
Amid the stress, a few bright spots emerged.
November was brutal—Bitcoin down 17%, the worst month since 2022—yet context matters.
From January’s lows, BTC remains up massively YTD, buoyed by halvings, ETF approvals, and nation-state adoption.
Today’s crash, absent existential threats, mirrors 2018’s “crypto winter” that birthed DeFi’s $100 billion boom.
Decembers are usually red for bitcoin:
Meanwhile Institutions are accumulating dips, as ETF data subtly affirms.
In essence, today’s crash is a symphony of short-term pressures—liquidations, yields, exploits—against a crescendo of long-term tailwinds.
This is more a crypto recalibration than a crypto crash.
Krishnan is a Bangalore-based crypto writer dedicated to simplifying complex crypto concepts. He covers blockchain, DeFi, and NFTs, with a focus on real-world asset tokenization and digital trust. Previously he has written on Real Estate related assets for NoBroker. Krishnan holds a B.Tech degree from the College of Engineering Trivandrum.
