Crypto earthquake: investors flee from risk, global markets feel the impact, precious metals climb

The collapse of cryptocurrencies has triggered new waves of volatility and is putting pressure on global financial markets. Meanwhile, investors are seeking protection by turning their attention to precious metals: gold remains well above $4,200 per ounce, while silver has reached new all-time highs at nearly $58 per ounce.

Cryptocurrencies have plunged sharply: Bitcoin dropped as much as 6%, falling below $86,000 in early Asian trading, while Ether fell more than 7% to around $2,800. Most tokens followed a similar trend, with Solana down 7.8%. The slump in digital assets has also affected global markets: Asia closed mixed, with the Nikkei losing almost 2%, and Europe followed suit, with most indices in the red.

All-time highs are already a distant memory, and the cryptocurrency market is navigating treacherous terrain after weeks of selling that began when about $19 billion in leveraged bets were wiped out in early October, just days after Bitcoin reached its all-time high of $126,251. The data is clear: since the beginning of the year, Bitcoin has fallen -8.47%, while Ethereum has dropped -15.66%.

Traders are preparing for even steeper downward movements. The start of December is therefore marked by a risk-off sentiment. The main concerns are the limited inflows into Bitcoin ETFs and the lack of buying on dips. The trend is likely to continue in this direction throughout the last month of the year, with $80,000 seen as the new support level for Bitcoin.

Investors are also closely watching recent statements from Strategy CEO Phong Le. In a podcast released on Friday, the executive explained that the company might consider selling its reserves if the mNAV - a metric comparing enterprise value with Bitcoin holdings - turns negative. Currently, Strategy holds Bitcoin worth $56 billion, and according to its website, its mNAV has fallen to 1.19.

Additional uncertainty has come from S&P Global Ratings, which downgraded the stability rating of USDT, the world’s largest stablecoin, to its lowest level, and from the People’s Bank of China, which highlighted the risks facing virtual currencies and urged government agencies to intensify oversight to minimize illegal activity.

In a market that seems more uncertain than ever, December begins with palpable tension: confidence in digital assets wavers, while traditional safe-haven assets continue to outperform, and investors seek a breath of relief. In the coming weeks, the ability to react quickly to new shocks could make the difference between weathering the storm or being swept away.

Andrea Pelucchi