Leading Bitcoin experienced a 36 percent decline from its high of $126,198 on October 6 to a low of $80,660 on November 21, wiping out nearly $700 billion in investor assets.
The cryptocurrency world is suffering from a massive loss of assets of $1.16 trillion in the last 50 days. Leading Bitcoin experienced a 36 percent decline from its high of $126,198 on October 6 to a low of $80,660 on November 21, wiping out nearly $700 billion in investor assets.
This $1.16 trillion sum includes over a trillion dollars in value loss by the top 10 cryptocurrencies and about a hundred billion dollars in market capitalization losses by a handful of crypto stocks such as US-based Strategy Inc. (Strategy for short; formerly known as MicroStrategy Inc).
Strategy’s shares are down 67 percent from their November 2024 all-time high, reminding investors of how the stock plunged 95 percent during the dot-com bubble.
According to experts, Bitcoin has rallied over the week amid expectations of a rate cut and a possible resumption of bond purchases by the US Federal Reserve as part of its December policy. Hopes for a rate cut and a resulting liquidity boost appear to have contributed to Bitcoin bottoming out. The irony is that it is the same liquidity or excess money supply that it was trying to combat with its limited float of 21 million that is keeping it afloat. The price is currently at $90,915, down around 28 percent from its peak in October.
Other major cryptocurrencies also continued to plummet, triggered by Bitcoin (see chart).
Loss in crypto stocks
Crypto stocks have also lost just as much. Shares of Bitcoin financial companies (companies that invest and hold Bitcoin as part of their financial assets) such as Strategy and Metaplanet (Japan) have fallen 51 percent and 35 percent, respectively. Bitcoin miners MARA Holdings and Riot Platforms are down 43 and 25 percent, respectively. Crypto exchanges Coinbase and Bullish recorded losses of 29 percent and 37 percent, respectively.
Strategy Inc, ETFs
Since the US government gave the green light to spot Bitcoin ETFs in January 2024, the market has been flooded with crypto ETFs. This includes not only spot ETFs, but also leveraged ETFs, which are simply instruments of mass speculation. In addition to investor funds, a leveraged ETF also borrows money to trade cryptos. The most popular are funds that aim to earn double the daily return of spot Bitcoin. Twice as many returns and twice as many drawdowns!
Apart from that, there are also leveraged ETFs that are focused on Strategy, which in turn is a leveraged company that is focused on Bitcoin. These have more layers (leverage) than your average pastry!
So what’s so special about Strategy that there are ETFs that track its stocks? In fact, Strategy is a data analytics company that transformed into a Bitcoin treasury company in 2020. It raises debt and equity funds against the security of Bitcoins. It uses these funds to buy Bitcoin and relies on the long-term increase in the value of the cryptocurrency. It now has 6.4 lakh Bitcoins, or about 3.1 percent of the total Bitcoin float (about 20 million), at an average price of $74,000 (as of Q3 2025).
However, the model is based on the unrealistic assumption that Bitcoin returns can consistently exceed investors’ expected returns. The volatility of Bitcoin prices is also shaking Strategy’s shares. For example, the market cap to Bitcoin NAV ratio, which was about 1.7x in July 2024, is now 1.1x. This could worsen if MSCI decides in January to exclude from its indices companies that have invested more than 50 percent of their assets in digital assets (Strategy is one such company).
MSTU and MSTX are two large leveraged ETFs that aim to provide twice the daily return of Strategy stocks. The total assets under management of these ETFs were approximately $4.7 billion as of December 2024. Now they have been reduced to just $831 million. Crypto ETFs, along with such leveraged ETFs, have lost $72 billion in investor assets since Bitcoin peaked in October.
Gold: The real hedge
All of this begs the question: What purpose do cryptos like Bitcoin serve? Are they a store of value or a hedge against inflation?
Given this volatility, can they really be a store of value? Given these declines and inflation still unchecked, have they protected investors? Apparently not. And they are far from becoming legal tender.
On the other hand, gold did exactly the opposite. In dollar terms, gold has returned 62 percent year-to-date, while Bitcoin is down 2.7 percent.
What’s amazing is that gold, valued at about $32 trillion globally, has attracted $43 billion in net inflows into U.S. gold ETFs so far in 2025. Meanwhile, cryptos, which represent $3 trillion in asset value (according to CoinMarketCap), have attracted the equivalent of $44 billion in inflows into crypto ETFs traded on U.S. exchanges. Questions the sanity of crypto bulls.
At the same time last year, we asked whether Bitcoin is a currency, a store of value or a payment innovation. A year later and 16 years into Bitcoin, the question remains.
Against this backdrop, India’s stance on cryptos stands in stark contrast.
Published on November 29, 2025