Heading into late November, the crypto sector is absorbing a sharp reversal after a year that seemingly delivered everything the industry wanted: spot ETFs, friendlier legislation, and even vocal support from the White House and some corporate treasuries. Global crypto market cap peaked near $4.3 trillion in early October before a flash crash erased about $1 trillion, leaving capitalization near $3.2 trillion, roughly 23% below its high and 16% under January levels.
Flagship tokens such as Bitcoin, Ethereum, and Solana have all dropped by double digits in recent months while U.S. stock indexes remain solidly positive for the year. Bitcoin trades around $90,000, more than 25% off its 2025 high and about a third below some intrayear peaks, while altcoins have fared worse. The drawdown has punished listed crypto proxies like Strategy, formerly MicroStrategy, whose stock is down more than 60% from its high and has been excluded from the S&P 500 as index providers reassess volatility and concentration risks.
The slump comes despite, and in some critics’ eyes because of, greater institutionalization. Actor and author Ben McKenzie, a prominent skeptic, argued in a recent CNN interview that crypto’s extreme leverage and lack of underlying cash flows make it a "canary in the coal mine" for broader risk sentiment and a "zero-sum game" that amplifies boom-bust cycles. Others warn that heavy corporate Bitcoin buying, notably by firms like Strategy, could exacerbate forced selling if those companies come under pressure.
For investors, the debate now centers on whether 2025’s slide is a mid-cycle reset in a longer bull market or the opening act of a deeper "crypto winter." If prices stabilize near current levels, dollar-cost averaging into higher-quality coins like Bitcoin and Ethereum could still pay off over a multiyear horizon. A renewed leg down, by contrast, would likely hit altcoins hardest and test the risk management of institutions that piled in during the ETF and policy euphoria, with knock-on implications for correlated high-beta tech stocks.
