Crypto’s got seasonal affective disorder

Instead of No-shave November, this year bitcoin investors are trying out a new spinoff: No-gains November.

The blue chip cryptocurrency is seriously stuck in a rut. It’s down 10.26% over the past week, and today hit its worst monthly performance since the Oscars’ slap back in 2022. The drought has gotten so bad that bitcoin has now shed roughly a quarter of its value in November alone.

As the OG crypto, bitcoin’s slide is bringing the rest of the digital asset crew down with it: Ether fell 3.17% today, solana sank 4.55%, and XRP lost 2.64%. Its flop era is hitting stocks, too: Strategy lost 3.74%. And don’t even get us started on altcoins.

Earlier this year, digital assets were riding high on a warm embrace from the White House and a booming market for risk assets. But crypto investors were spooked first by fears that AI valuations are overblown, and more recently worries that the Federal Reserve may not cut rates next month. That matters for bitcoin, because when interest rates stay higher, growth assets that are boosted by lower borrowing costs—like crypto—tend to feel the brunt of the pain.

Is a bitcoin bounce in our future?

While bitcoin has been having a tougher week than Whitney Leavitt from Dancing With the Stars, it’s by no means an industry implosion to the level of past crypto winters. Just don’t expect an immediate comeback.

“Liquidity will likely dry up across markets this week and heading into the holiday season,” head of research at the crypto data provider Kaiko Adam Morgan McCarthy told Barron’s.

Many bulls argue that the longer this drought goes on, the better the buying opportunity becomes. But the volatility of the past month is also a great reminder why financial advisors don’t advise putting any more than 5% of your portfolio in bitcoin.—LB