Bitcoin and Ether slumped on Dec. 1, 2025, as the latest wave of selling in digital assets continued. Bitcoin slid about 5% over the past week (at the time of writing), while Ether tumbled about 7%, Solana sank more than 10%, marking broader losses across the crypto industry.
Bitcoin exchange-traded funds (ETFs) recorded their second-worst month in November, with $3.5 billion in outflows. The token is now down more than 30% from its October all-time high above $126,000, as quoted on Yahoo Finance.
High Leverage & Macro Uncertainty Act as Headwinds
Ben Emons, founder and CIO of Fedwatch Advisors, pointed to the huge leverage in crypto markets, as quoted on CNBC. He also noted Bitcoin’s rising correlation with equity benchmarks like the Nasdaq.
Macroeconomic uncertainty, especially around the future course of U.S. interest-rate cuts, continues to weigh on risk-on assets. Concerns about overheated valuations in AI-driven stocks added volatility to November’s broader market backdrop, adding to downside risks in crypto.
China Warning Pressures Asian Crypto Stocks
Sentiment weakened further after the People’s Bank of China issued a statement Saturday, cautioning against illegal digital currency activities. This triggered declines in Hong Kong-listed crypto-linked companies during the Dec. 1 session, as quoted on CNBC.
Short-Term Weakness but Long-Term Gains Likely?
Muted trading volumes on both centralized and decentralized exchanges hint at subdued risk appetite across the crypto market, as mentioned on CNBC. "While conditions can shift quickly, a sustained rally still appears unlikely in the near term, especially before year-end. But 2026 may present a very different setup," said a 10X Research client note on Monday, as quoted on Yahoo Finance.
Some Investment Firms Suggest 1% to 4% Crypto Exposure
Bank of America BAC advises its wealth management clients to consider adding a small amount of cryptocurrency to their portfolios. The firm recommends a 1-4% allocation to digital assets for clients of Merrill, Bank of America Private Bank and Merrill Edge, as quoted on Yahoo Finance.
Starting Jan. 5, the firm's CIO-covered bitcoin ETFs will include the Bitwise Bitcoin ETF BITB, Fidelity's Wise Origin Bitcoin Fund FBTC, Grayscale's Bitcoin Mini Trust BTC, and BlackRock's iShares Bitcoin Trust IBIT, the above-mentioned Yahoo Finance article noted.
In an early October note, Morgan Stanley suggested that 2-4% of a portfolio should be in crypto, describing it as a "speculative but increasingly popular asset class that many investors, but not all, will seek to explore," as mentioned on a Yahoo Finance article.
Meanwhile, Vanguard Group, the world’s second-largest asset manager, has also decided to permit crypto ETFs and mutual funds to be traded on its platform, going away from a longstanding position, per Bloomberg, as quoted on Yahoo Finance.
Apart from Bitcoin ETFs, investors can consider Ether ETFs like iShares Ethereum Trust ETF ETHA, Grayscale Ethereum Trust ETF ETHE and Fidelity Ethereum Fund ETF FETH.
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Bank of America Corporation (BAC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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