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Bitcoin News Update: S&P’s $2 Trillion Crash Rattles the Crypto Market’s Foundation

Bitcoin News Update: S&P’s $2 Trillion Crash Rattles the Crypto Market’s Foundation

Bitget-RWA2025/11/21 04:36
By:Bitget-RWA

- S&P 500's $2 trillion late-2025 drop triggered crypto volatility, with Bitcoin/Ethereum swings causing $1B+ daily liquidations. - High-leverage trading (20x-100x) and institutional outflows exacerbated crypto's fragility, exemplified by a $168M trader loss. - Tech stock declines (2%+ on Nov 17) and thinning liquidity amplified crypto's instability, erasing $1.2T in sector value since October. - Major crypto firms like BitMine Immersion (3.6M ETH) face scrutiny as MSCI considers excluding Bitcoin-focused

The S&P 500’s dramatic $2 trillion turnaround in late 2025 has sparked renewed turbulence in the crypto sector, as leveraged positions and institutional withdrawals clash with already thin liquidity. The leading index

, deepening a widespread selloff that has wiped out $2 trillion in value since October. This negative momentum has spilled over into digital assets, where , resulting in more than $1 billion in forced liquidations in just one day. The connection between traditional finance and cryptocurrencies is now tighter than ever, with macroeconomic factors and speculative trading amplifying crypto’s natural volatility.

This recent upheaval started with

on Oct. 10, which pushed below $20,000 for the first time in several years. Since then, traders have increasingly turned to high-leverage strategies, with some positions reaching 20x to 100x leverage. One notable example involved an anonymous trader who at the lowest point, only to reinvest in new leveraged trades. These bold moves echo the risky behavior that , highlighting the dangers of excessive risk-taking in a market where a 2% move can trigger a wave of liquidations.

The S&P 500’s slide has only heightened these vulnerabilities.

as well as the crypto industry, fell by almost 2% on Nov. 17, with both the Nasdaq and Dow Jones Industrial Average also posting losses. This broad decline has shaken investor confidence, especially among those who had invested in crypto during the earlier AI-driven surge. Now, as attention shifts from AI to tariffs and economic headwinds, crypto’s liquidity has dried up, making price swings even more severe.
Bitcoin News Update: S&P’s $2 Trillion Crash Rattles the Crypto Market’s Foundation image 0
For instance, , while Bitcoin dropped to $87,000 before rebounding to $91,000.

Institutional withdrawals have added further pressure.

in early November, based on data from The Kobeissi Letter. These redemptions, together with leveraged trading, have fueled a self-perpetuating cycle of selling. “The crypto market is fundamentally unstable,” the research group commented, noting that the sector has lost $1.2 trillion in capitalization since late October. , where even relatively small trades can cause significant price changes.

This heightened volatility has also put the spotlight on companies with substantial crypto reserves.

(BMNR), for example, , making it the world’s largest treasury. At the same time, reserves in addition to 40,050 ETH, as it continues a $200 million stock buyback. However, these companies are under scrutiny as from its indices.

Amid the turmoil, some investors see potential.

of 10, matching lows last seen in February, yet Bitcoin has climbed 25% since its April trough. Meanwhile, gold has outperformed crypto by 25 percentage points since October, signaling a move toward more traditional safe assets.

As these forces play out, the months ahead will reveal whether crypto can regain stability or if more upheaval is in store. For now, the S&P 500’s reversal has laid bare the vulnerabilities of a market still adapting to macroeconomic shifts and speculative excess.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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