Bitcoin price news: BTC slips below $88,000, but Strategy, Circle, Gemini among those sharply lower
Bitcoin’s Latest Dip: What Drove ?
Bitcoin enthusiasts woke up to a familiar sight on Tuesday: the king of cryptocurrencies slipping into the red. BTC price dropped about 1% over the past 24 hours, trading just shy of $88,000. This pullback stands in stark contrast to surging commodities like gold, silver, and copper, which hit record highs before a slight retreat in afternoon trading.
While U.S. stocks edged higher—the Nasdaq up 0.45%—crypto-related equities told a much grimmer story. Stocks tied to digital assets plummeted far more aggressively than Bitcoin itself, signaling deeper concerns in the sector. Let’s break down the key drivers behind this Bitcoin price news and what it means for investors heading into year-end.
Crypto Stocks Take a Beating: Strategy, Circle, and Gemini Lead Declines
The hardest hit were digital asset treasury companies, often seen as high-beta proxies for Bitcoin’s performance. These firms, which hold massive BTC reserves on their balance sheets, amplify market moves—both up and down.
- Strategy (MSTR): Down 4.2%, continuing its volatile ride as a leveraged BTC play.
- XXI (XXI): Plunged 7.8%, reflecting investor jitters.
- ETHZilla (ETHZ): The biggest loser at 16% lower, underscoring Ethereum ecosystem pressures.
- Upexi: Fell 9%, adding to the pain for treasury-focused names.
Other notable decliners included Gemini (GEMI), Circle (CRCL), and Bullish (BLSH), each dropping around 6%. These sharp moves highlight how crypto equities are more sensitive to sentiment shifts, liquidity crunches, and year-end tax strategies than spot BTC prices alone.
Tax-Loss Harvesting: The Year-End Culprit?
Analysts point to tax-loss harvesting as a major force behind the selling pressure. In simple terms, this strategy involves selling losing positions to lock in capital losses, which can offset taxable gains elsewhere in a portfolio. It’s especially popular near December 31, when investors tidy up balance sheets for tax season.
Digital asset hedge fund QCP Capital highlighted this dynamic in illiquid markets: “The end of year typically sees portfolio managers trimming exposure to risk assets—not just ahead of holidays, but to create taxable events and clean up year-end holdings.”
Paul Howard, senior director at trading firm Wincent, added: “In some cases, balance sheets simply don’t want to show cryptocurrency holdings at year-end.”
This selling exacerbates downside momentum, particularly for smaller-cap crypto stocks with thinner trading volumes.
Thinning Leverage and Options Expiry Add Volatility
Markets are also more prone to swings due to dropping open interest in BTC and ETH perpetual futures—down $3 billion and $2 billion, respectively. Lower leverage means less crowded trades, but it leaves prices vulnerable to big players.
QCP Capital warns of heightened risks from Friday’s record Boxing Day options expiry on Deribit, representing over 50% of total open interest. “While downside bets have eased, persistent $100,000 calls show tentative optimism for a Santa rally,” they noted.
However, history suggests relief: Holiday-driven spikes or dips often fade as January liquidity returns, leading to mean reversion.
Trump’s Fed Chair Demand Amid Hot Economy
Adding macro intrigue, President Donald Trump took to Truth Social, urging his incoming Federal Reserve chair to cut rates during good times. “I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason,” he posted.
This comes hot on the heels of strong economic data: Inflation-adjusted GDP grew at a 4.3% annualized pace in Q3, per the Bureau of Labor Statistics. Trump lamented how “good news” now spooks markets fearing rate hikes to curb ‘potential’ inflation.
Despite S&P 500 and Nasdaq gains Tuesday, persistent inflation worries cap enthusiasm. Fewer rate cuts in 2026 could pressure risk assets like Bitcoin, though Trump’s pro-crypto stance offers a counterbalance.
2025 Recap: L1 Tokens Lag Despite Progress
Zooming out, 2025 was a tale of two realities for blockchains. Layer-1 tokens broadly underperformed, with many ending the year flat or negative, even as total value locked (TVL) rose and institutions piled in.
This “structural decoupling”—network growth without token price gains—defined the year. Key trends included:
- Regulatory Wins: Clearer U.S. rules boosted adoption.
- Institutional TVL Surge: Ecosystems like Bitcoin and Ethereum saw record inflows.
- Protocol vs. App Revenues: Applications increasingly captured value over base layers.
Bitcoin, in particular, got “crushed” relative to expectations, but brighter days may lie ahead.
2026 Outlook: Bitcoin as Top Performer?
VanEck’s David Schassler predicts a sharp rebound for Bitcoin and gold, driven by rising demand for hard assets. After 2025’s stagnation, BTC could lead in 2026 as catalysts emerge:
- Post-halving supply dynamics fully kicking in.
- Trump-era policies favoring crypto.
- Mean reversion from current $2.6 trillion market cap toward $4 trillion.
Wincent’s Paul Howard tempers hype: “More consolidation ahead, with no quick retrace from October highs.” Expect volatility, but strategic positioning in BTC and quality alts could pay off.
Key Takeaways for Crypto Investors
- Short-Term Pain: Tax harvesting and thin liquidity fuel dips—buying opportunities for the patient.
- Stock vs. Spot Divergence: Crypto equities amplify BTC moves; diversify wisely.
- Macro Watch: Fed policy under Trump will dictate risk appetite.
- Long-Term Bullish: 2026 setups favor Bitcoin rebound amid institutional tailwinds.
As BTC slips below $88,000, stay vigilant. Year-end noise often masks underlying strength. Will we see that Santa rally, or more consolidation? Track Bitcoin price news closely as options expire and 2026 looms.
