Why is Bitcoin dropping again today? Crypto markets start December with another worrisome sell-off

December is a month that many look forward to as holiday festivities kick into full gear and extended R&R with our loved ones nears. But for cryptocurrency investors, the month is off to anything but a good start.

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As of the time of this writing, cryptocurrency prices are down across the board on the first day of December trading. This encompasses significant price drops of major cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana. Here’s what you need to know.

Cryptocurrencies begin December with steep declines

Nearly every major cryptocurrency is seeing significant declines on the first trading day of December. As of the time of this writing, most major coins are down over the past 24 hours, including:

• Bitcoin: down 5%

• Ethereum: down 5.5%

• XRP: down 6.8%

• BNB: down 5.9%

• Solana: down 6.8%

Additionally, meme coins have also declined, with Dogecoin down 8%.

Unfortunately, these drops aren’t outliers for cryptocurrencies as of late. Over the past month, big-name cryptocurrencies have been hit hard as investors sold off the digital tokens amid declining risk appetites.

Over the last 30 days, Bitcoin has now declined 21%, dropping from around $111,000 per token to today’s current price of just over $86,600.

During the same period, Ethereum fell by more than 26%, XRP by more than 18%, BNB by more than 24%, and Solana by more than 31%. Dogecoin is down more than 26% over the past month.

Why are Bitcoin and other cryptocurrencies dropping today?

There isn’t a single event weighing on Bitcoin and other cryptocurrencies today, just like there has not been one single event weighing on the digital token markets over the past month.

Instead, the first trading day of December drops in cryptocurrencies across the board are likely being spurred by multiple factors.

Perhaps the most significant factor behind the December 1 crypto drop is ongoing uncertainty about whether the Federal Reserve will vote to cut interest rates when the central bank meets to vote on the matter on December 9 and 10.

A drop in interest rates is generally seen as a good thing for cryptocurrencies as rate drops increase liquidity in the markets, which typically spurs investors to take more risk.

As cryptocurrencies are among the most volatile assets, increased risk-taking can stimulate investment in the coins, sending their prices higher. Yet if the Fed does not reduce rates, that increase in liquidity will not materialize, which could impact risk asset investments.

Barchart reports that the markets are discounting an 83% chance that the Federal Reserve’s monetary policymaking group, the Federal Open Market Committee (FOMC), will cut interest rates by 25 basis points.

However, rate drops aren’t the only reason Bitcoin and other cryptos are starting December on the wrong foot.

As Fast Company previously reported, in November, investors increasingly turned sour on artificial intelligence stocks, including on AI heavyweights like Nvidia Corporation (Nasdaq: NVDA) and major OpenAI investor Microsoft Corporation (Nasdaq: MSFT).

Over the past month, NVDA shares have declined nearly 12% and MSFT shares are down more than 9%.

The share prices of AI and AI-adjacent companies have been highly volatile this year amid growing fears of an AI bubble. Many investors who invest in those companies have high-risk appetites, which is why many AI investors are also cryptocurrency investors.

And when one high-risk asset declines, investors tend to sell off their other high-risk assets to lock in any gains and prevent further losses. Continuing fears of an AI bubble, then, could be influencing declines in cryptocurrency prices.

Aside from these two ongoing factors that have been weighing on crypto markets for a while now, there are a few more recent events that may be contributing to crypto losses on the first trading day of December.

According to a report from CNBC, People’s Bank of China issued a warning on Saturday about illegal activities involving digital tokens. That warning sent shares of companies in the digital asset sector lower on the Hong Kong market.

Additionally, CoinDesk reports that early Monday saw notable forced liquidations in crypto markets as traders failed to meet margin requirements for leveraged positions, putting pressure on cryptocurrency prices.

2025 turns negative for crypto

When the year began, many investors and industry watchers expressed optimism that Bitcoin and other cryptocurrencies were in for a tremendous year of growth in 2025, largely thanks to the incoming Trump administration and its crypto-friendly policies.

But while tokens like Bitcoin did reach an all-time high of more than $126,000 this year, the crypto king has declined well below its 2025 starting price.

As of this writing, Bitcoin has lost about 7.24% of its 2025 opening value. Ethereum has lost 14.6% of its value, and Solana has lost 32%.

BNB is a rare bright spot for major cryptocurrencies this year. The coin has seen growth of nearly 18% so far this year.

Of course, given the volatile nature of cryptocurrencies, it’s always possible that things could reverse quickly. There is still one month left in the year, and if there is a late bull run on the tokens, Bitcoin and other cryptocurrencies could still come out green for the year.

Whether or not that happens likely depends a lot on the Fed’s rate cut decision next week—and, of course, the greed and fear that investors feel in the run-up to the new year.

This post originally appeared at fastcompany.comSubscribe to get the Fast Company newsletter: http://fastcompany.com/newsletters