On December 2, cryptocurrency-related concept stocks in A-shares and Hong Kong markets extended their losses from the previous session. By the close, the digital currency and blockchain sectors in A-shares saw broad declines, with stocks like Jing Beifang, Hailian Jinhui, and Cuiwei Shares dropping around 1%.

Meanwhile, the cryptocurrency market has been on a downward trajectory since December. After nearly two months of volatility, Bitcoin plunged 8% intraday on December 1, briefly falling below $84,000—nearly 30% off its all-time high of $126,251 in early October. Ethereum saw even steeper losses, dropping over 10% in a single day to hit a seven-week low. Despite a slight rebound on December 2, the overall bearish sentiment persisted.

Industry analysts attribute the crypto correction to multiple factors, including shifting macroeconomic policy expectations, institutional deleveraging, and concentrated liquidation of leveraged positions. Regulatory scrutiny has also weighed on related assets. As year-end approaches, overall risk appetite has weakened, with heightened sensitivity to market volatility.

The crypto market’s December 1 sell-off triggered significant forced liquidations, with data from CoinGlass showing over 270,000 leveraged positions worth $985 million wiped out—90% of which were long positions.

The ripple effects spread to equity markets. In U.S. stocks, Coinbase fell over 4%, while Bit Digital dropped more than 5%. Hong Kong-listed concept stocks like Yunfeng Financial Group and OSL Group declined nearly 3% and 1%, respectively. A-shares’ digital currency and blockchain sectors also remained weak.

Analysts note that while direct exposure to crypto prices varies among companies, sector-wide sell-offs often occur during risk-off periods—especially amid regulatory tightening and global market turbulence. Institutional behavior has been a key driver, with large investors offloading over $20 billion in crypto assets since September, according to CoinShares’ James Butterfill.

ETF flows have also slowed, with U.S. Bitcoin spot ETFs seeing net outflows post-November. “ETF trends reflect shifting institutional risk appetite,” noted a Wall Street family office investor.

Macro factors further fueled the downturn. As Fed officials signaled prolonged restrictive policies, market expectations for a December rate cut fell below 50%, pressuring rate-sensitive assets like Bitcoin. Traditional risk assets, including the Nasdaq and S&P 500, also wobbled, amplifying crypto’s high-beta moves.

Regulatory developments added pressure. China recently reaffirmed its ban on virtual currency speculation, explicitly targeting stablecoins’ risks in money laundering and cross-border violations. Legal experts caution that retail participation remains high-risk, with potential civil and criminal liabilities.

While the sell-off appears driven by institutional rebalancing rather than retail panic, analysts warn Bitcoin’s next support test at $80,000 could determine whether it revisits April’s lows.