Crypto Crash 2025: Bitcoin Plunges $1 Trillion Just Before Thanksgiving
- A sudden $1 trillion cryptocurrency market crash has seen Bitcoin plummet from a record $126,000 to $81,000, causing severe losses for retail traders just before the holidays.
For many retail investors, this year's Thanksgiving dinner will likely be served with a side of awkward conversation. A massive $1 trillion wipeout in the cryptocurrency market has set the stage for uncomfortable family gatherings, as traders who spent the year evangelizing digital assets now face significant losses. The timing is particularly brutal, occurring just as families come together for the holiday, forcing enthusiasts to defend their investment strategies against a backdrop of plummeting prices and renewed skepticism.
The market downturn has been both sudden and severe. After a significant rally following President Donald Trump’s election, Bitcoin reached an all-time high of over $126,000 in early October. However, the euphoria was short-lived. The world's largest cryptocurrency has since tumbled to around $88,000, putting it on track for its worst monthly performance since 2022. Smaller tokens and altcoins have fared even worse, with assets like Ether dropping roughly 40% from their August peaks, leaving portfolios deep in the red.
This scenario feels all too familiar for long-term market participants. It echoes the holiday season of three years ago, when the collapse of the FTX exchange coincided with family gatherings, forcing traders to explain why the "future of finance" was imploding. This recurring pattern—where retail traders hype up crypto to friends and relatives throughout the year only to see values crash in the winter—has become a painful holiday tradition. Investors are now bracing themselves for the inevitable question from concerned relatives: "Why are you still investing in this?"
The reasons behind this latest crash are multifaceted, extending beyond simple market volatility. Investors have grown increasingly pessimistic about two major factors that previously drove the bull market: the expectation of multiple interest-rate cuts by the Federal Reserve and the promise of widespread institutional adoption. When interest rates remain high, safer investments become more attractive compared to risky assets like crypto. Consequently, investors have pulled more than $3.5 billion from US-listed Bitcoin exchange-traded funds (ETFs), signaling a retreat from the sector.
For those who have made crypto their primary focus, the stakes are incredibly high. Megan Lineberry, a former nurse who quit her job to trade full-time, faces intense scrutiny. Having convinced friends, family, and even her hairdresser to invest during the boom times, she now has to confront them as the market crashes. While she remains a believer in the long-term potential of the technology, explaining the current volatility to people who are losing money on her recommendation is a daunting task.
Others, like Zach Lonergan, are taking a more defensive approach. With 85% of his portfolio in Bitcoin, he views the holiday interrogation as an opportunity to "evangelize" and educate his family, comparing his loyalty to crypto to supporting a sports team that struggles to win. However, not everyone shares this resilience. Influencers like Chelsea Von Schneden express dread at the prospect of sitting down with family members who bought into altcoins on her advice, only to see those investments stagnate or lose value over the last two years.
Some traders believe this holiday interest itself serves as a negative market signal. Kyle Figs, a content creator, views Thanksgiving as a reliable "top signal" for the market, similar to the peaks seen in 2017 and 2021. He notes that when older generations and non-investors start asking about niche topics like Bitcoin mining at the dinner table, it often indicates the market has become too frothy and is due for a correction. He predicts Bitcoin could fall even further, potentially testing the $65,000 level, as the hype cycle cools down once again.