Bitcoin fell sharply on Monday as the new month began with renewed volatility in the cryptocurrency market.
Bitcoin declined sharply on Monday as the new month opened with renewed turbulence in the crypto market, after an incident at DeFi platform Yearn Finance triggered fresh concerns about liquidity.
The world’s largest cryptocurrency last traded 6.6% lower at $85,822 by 08:41 ET (13:41 GMT). Bitcoin fell as low as $84,930 in the last 24 hours. It slumped more than 16% in November.
"We see a BTC trading range of $80,000 to $92,000, without any macro catalysts to move the dial in a market that now lacks any meaningful volume. BTC is down about 7% YTD and 20% for the quarter," Tom Cohen, Head of Investments at Algoz, a quantitative digital asset investment firm, told Investing.com
"The next shock might again be to the downside, if the Fed decides not to cut rates," he added.
The latest sell-off was sparked after Yearn Finance said it was investigating an “incident” in its yETH liquidity pool. Reports indicated that a flaw had allowed an attacker to mint an extremely large amount of yETH tokens, effectively flooding the pool with invalid supply.
In simple terms, the exploit enabled someone to create tokens out of thin air, undermining confidence in the pool’s backing assets and prompting traders to rush for the exits.
The disruption stoked immediate volatility in correlated assets, with Bitcoin and other cryptocurrencies falling sharply.
Fed rate cut bets in focus
The decline came just after Bitcoin closed out November with a sharp monthly drop. The pressure has persisted despite improving sentiment around U.S. monetary policy, which had supported risk assets toward the end of last month.
Expectations of a Federal Reserve rate cut in December strengthened notably over the past week, driven by weaker U.S. growth indicators and signs that inflation pressures are moderating.
Traders now assign an 87% probability to a 25-basis-point cut at the December 9–10 policy meeting, compared with odds near 40% only a week ago. The prospect of easier monetary conditions had initially helped steady crypto markets, but the Yearn Finance incident overshadowed that optimism.
Adding to the macro uncertainty, U.S. President Donald Trump said over the weekend that he already knows whom he will nominate as the next Federal Reserve Chair, though he has not publicly disclosed a name. The comment intensified speculation around potential candidates, including former White House economic adviser Kevin Hassett, who is viewed as leaning dovishly on monetary policy.
Strategy sets $1.4B reserve, buys more Bitcoin
Strategy, formerly MicroStrategy, moved to shore up confidence around its preferred-stock payouts on Monday, unveiling a $1.44 billion U.S. dollar reserve intended to support future dividends.
Funded through last week’s common-stock sales, the reserve is designed to hold at least a year’s worth of payments, with plans to build it out to cover 24 months or more. CEO Phong Le said the current balance represents roughly 21 months of dividends.
The company also reset its full-year expectations after Bitcoin’s slide to about $86,000, well below its earlier year-end assumption of $150,000. Strategy now expects net income to fall anywhere between a $5.5 billion loss and a $6.3 billion profit, reflecting a new bitcoin price range of $85,000 to $110,000.
Its Bitcoin yield target was lowered to 22%–26% from a prior 30%. The projected full-year bitcoin dollar gain was also reduced to $8.4 billion–$12.8 billion, down sharply from a previous $20 billion target.
Moreover, Strategy disclosed a small new purchase of 130 bitcoins for $11.7 million, or about $89,860 per token. The company now holds 650,000 BTC acquired at a combined cost of $48.38 billion, averaging $74,436 per coin.
Crypto price today: Ether down 8%, XRP slumps over 8%
Most altcoins also saw sharp declines on Monday amid fresh panic.
World no.2 crypto Ethereum tumbled nearly 8% to $2,810.44.
World no. 3 crypto XRP slumped 8.5% to $2.01.
Solana, Cardano, and Polygon lost between 9% and 12%.
Among meme tokens, Dogecoin sank over 1% and $TRUMP retreated 6.6%.