Coinbase stock (NASDAQ: COIN) plummeted 5% in pre-market trading on Monday, as the crypto sector entered December under assault.
Bitcoin shed more than 5% to trade below $86,600, while Ethereum collapsed 5.5% to $2,820, the lowest level in months. Solana, XRP, BNB, and altcoins all posted losses.
The selloff marks a brutal continuation from November’s wreckage: Bitcoin’s 17.5% monthly loss was its worst month since March, while Ethereum cratered 22% for its worst stretch since February.
The timing couldn’t be worse for the crypto sector, which hit an all-time high above $126,000 just weeks ago but now faces a perfect storm of Fed uncertainty, forced liquidations, and cascading contagion fears spreading from Asia’s currency markets.
Coinbase stock: Fed uncertainty and risk-off sentiment
The immediate trigger isn’t a single event; it’s a cocktail of headwinds. At the top of the list sits Federal Reserve jitters.
While JPMorgan and Goldman Sachs recently signaled optimism about a December 9-10 rate cut, market odds have whipsawed wildly.
As of Monday morning, traders were pricing in roughly an 83% probability of a 25-basis-point cut, but that optimism masks real uncertainty among Fed officials.
Rate cuts typically boost crypto by increasing liquidity and fueling risk appetite, yet the messaging remains muddled, leaving traders in a holding pattern.
Beyond the Fed, risk aversion is spreading from stocks to crypto. The November selloff in AI megacaps like Nvidia and Microsoft spooked high-beta investors who often hold overlapping positions in digital assets.
When these investors take losses in one high-risk bucket, they liquidate others to lock in gains elsewhere. Bitcoin’s November losses already signaled weakness; December’s downturn is accelerating capitulation.
Early Monday saw massive forced liquidations across futures markets as overleveraged traders couldn’t meet margin requirements, creating cascading liquidation cascades that further sped the decline.
CoinDesk data showed liquidations exceeding $646 million in a single 24-hour window, with longs accounting for nearly 90% of the total and Bitcoin losing $200 million in positions alone.
Ethereum saw another $159 million in longs wiped out.
Contagion risk: From Asia warnings to DeFi hacks
Monday’s selloff gained momentum from adverse headlines out of Asia and the DeFi ecosystem.
Japan signaled a 76% probability of a December 19 rate hike, triggering fears of a yen carry-trade unwind that rippled through risk assets globally.
Worse: China’s central bank reaffirmed its strict crypto ban on November 28th, issuing fresh warnings about stablecoins posing money-laundering risks, remarks that rippled through Asia-listed crypto stocks.
Adding fuel to the fire, Yearn Finance disclosed a $9 million exploit late Sunday involving an attacker minting 235 trillion fake yETH tokens and draining Balancer pools.
While Yearn’s core vaults remain secure, the hack underscores persistent DeFi security risks that periodically spook institutional and retail money out of the broader crypto complex.
The cumulative weight: Asia’s warnings, Japan’s rate-hike signals, forced liquidations, and DeFi fears, sent the total crypto market cap tumbling below $3 trillion, down from an October peak of $4.3 trillion.
Coinbase, being the bellwether for US retail and institutional crypto exposure, bore the brunt of the selling.
Coinbase’s plunge is symptomatic of a sector in transition.
After a euphoric run to $126K, Bitcoin and its ecosystem face genuine headwinds: Fed ambiguity, macro risk aversion, Asia’s tightening bias, and security concerns that investors can’t easily dismiss.
The traders will watch out whether JPMorgan’s rate-cut optimism pans out on December 10th to spark relief, or whether cryptoassets continue their November-to-December downtrend.
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