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Bitcoin Updates: $2 Billion Crypto Market Plunge Driven by Leverage and ETF Outflows Amid Regulatory Disagreement

Bitcoin Updates: $2 Billion Crypto Market Plunge Driven by Leverage and ETF Outflows Amid Regulatory Disagreement

Bitget-RWA2025/12/02 00:54
By:Bitget-RWA

- Cryptocurrency markets crashed on Nov 21, 2025, with $2B+ in leveraged losses as Bitcoin fell to $81,050, its lowest since April 2025. - 391,000 traders liquidated positions, Ethereum dropped 10%, and major tokens lost 20-35% amid record $2.47B ETF outflows from BlackRock's IBIT . - China reaffirmed crypto illegality while U.S. lawmakers criticized Biden's "Choke Point 2.0" regulatory approach, highlighting global policy divergence. - Market volatility intensified by over-leveraged long positions, macroe

Major Downturn Hits Cryptocurrency Market

On November 21, 2025, the cryptocurrency sector faced a sharp decline, resulting in over $2 billion in leveraged positions being liquidated within a single day. Bitcoin (BTC) dropped to $81,050, marking its lowest value since April 2025. According to Coinglass, approximately 391,000 traders saw their positions closed, with long trades making up $1.78 billion of the $1.91 billion in total losses.

Ethereum (ETH) also suffered a significant setback, tumbling 10% to $2,743. Other leading cryptocurrencies, including Solana and XRP, experienced losses ranging from 20% to 35% compared to their peaks earlier in November. The Crypto Fear & Greed Index plummeted to 11, equaling its lowest level since the FTX collapse in 2022.

Cryptocurrency Market Crash

This steep selloff was intensified by substantial withdrawals from Bitcoin exchange-traded funds (ETFs), with BlackRock’s IBIT alone seeing $2.47 billion in redemptions during November. Analysts point to a combination of global economic uncertainty, excessive leverage among traders, and the cyclical nature of Bitcoin’s issuance as key factors behind the downturn. The overall value of the crypto market fell by 6% in just 24 hours, dipping below the $3 trillion mark for the first time in five months.

Regulatory Responses and Global Perspectives

Amidst the chaos, China’s central bank reiterated its ban on cryptocurrencies, hinting at the possibility of stricter enforcement against digital assets. This stance stands in stark contrast to recent developments in the United States, where lawmakers have criticized the Biden administration’s regulatory approach, accusing it of hindering innovation in the crypto space. At the same time, China is emphasizing a shift toward green energy and low-carbon manufacturing, as announced by Minister of Industry and Information Technology Li Lecheng, though this policy is not directly linked to the current crypto market challenges.

Market Risks and Future Outlook

The recent turbulence highlights the inherent risks associated with leveraged trading and unclear regulatory frameworks. Experts observe that while the approval of Bitcoin ETFs in early 2025 brought more institutional investment into the market, it also increased the sector’s vulnerability to broader economic changes. Currently, many traders are adopting a wait-and-see approach, hoping that renewed ETF inflows and favorable economic news will help stabilize the market and reverse the recent downward trend.

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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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