- Bitcoin fell below $86,000, causing $637 million in market liquidations.
- Comments from Strategy CEO Michael Saylor regarding possible Bitcoin sales contributed to the sell-off.
- Bitmex co-founder Arthur Hayes highlighted Tether’s potential insolvency risks amid price drops.
- China’s reaffirmation of crypto bans added to negative market sentiment.
- Despite the crash, 88% of users on prediction market Myriad dismiss the likelihood of a crypto winter.
Bitcoin dropped 5% in 24 hours to an intraday low around $85,694, triggering $637 million in liquidations across the cryptocurrency market. The decline marked Bitcoin’s over 21% loss for October, with the price now roughly 31% below its all-time high, according to CoinGecko data. Ethereum and XRP also suffered, declining 5.6% and 6.5% respectively.
The sharp sell-off was driven by a momentum-driven drop leading to significant long position liquidations, according to SynFutures COO Wenny Cai. Comments by Strategy CEO Phong Le about the potential sale of Bitcoin to cover dividends intensified market fears. Le stated, “We can sell Bitcoin, and we would sell Bitcoin if needed to fund our dividend payments below 1x mNAV,” during a recent Apple.com/us/podcast/the-%2460-billion-bitcoin-bet-strategy-ceo-phong-le/id1482455669?i=1000738806091″>podcast. Strategy holds about 649,870 BTC valued at $56.26 billion based on current prices. Although these remarks sparked concern, traders on prediction market Myriad assign just a 5% chance of Strategy selling Bitcoin by the end of 2025.
Additional pressure came from BitMEX co-founder Arthur Hayes, who flagged Tether’s potential insolvency if Bitcoin and Gold prices fall by 30%, as mentioned in a recent tweet. Hayes explained that such a decline could wipe out Tether’s equity, placing the stablecoin at risk. Market worries about Tether’s stability can cause liquidity premiums to widen and increase volatility.
China’s central bank reiterated that cryptocurrency activity remains illegal and expressed ongoing concerns about stablecoins, as reported by China Daily, adding to bearish sentiment. Cai projects continued volatility in December, with possible short-term selling pressure and eventual long-term buying opportunities.
Despite recent losses and increased market volatility, Myriad users assign only a 12% probability to the arrival of a crypto winter.
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