Bitcoin plummets below $90,000 as AI future worries investors

12/12/2025 09:17 AST

Cryptocurrencies plummeted on Thursday, with bitcoin slipping below the $90,000 level as fresh concerns about artificial intelligence profits weighed on technology stocks.

According to Reuters data, Bitcoin was last down 2.5 per cent at $90,056.24, while ether tumbled 4.3 per cent to $3,196.62, erasing the past two days of gains, extending weakness that began in the U.S. trading session on Wednesday after the Federal Reserve cut interest rates.

US bitcoin spot exchange-traded funds (ETFs) saw $3.4 billion in net outflows in November, wiping out October's net inflows, according to data from Coindesk.

Concerns over leverage in the system, talk of a possible new crypto winter and underperformance versus equities all weighed on valuations and activity, overshadowing a handful of M&A deals and product launches, analysts at JPMorgan led by Kenneth Worthington said in a report. Flows into U.S. listed crypto products also turned negative, the analysts wrote.

The total crypto market capitalisation fell 17 per cent to $3.04 trillion, while crypto-related public equities lost 21 per cent of their value, Coindesk data showed.

"Bitcoin and Ethereum are facing renewed downside pressure, with BTC slipping from around $91,000 to $88,000 and ETH holding near $3,100 as markets brace for the potential Bank of Japan interest rate hike. A stronger yen raises the risk of unwinding yen carry trades which is a move that can temporarily weigh on crypto valuations as leveraged positions reset across global markets. However, the BOJ's tightening stands in contrast to widely expected Fed rate cuts in early 2026, setting up a period of heightened volatility that often creates attractive accumulation windows for long-term investors. We expect BTC to retest the $95,000-$100,000 range by early 2026, while ETH could climb toward $3,800 as institutional flows resume and macro conditions stabilize. Key indicators worth monitoring include the Crypto Fear & Greed Index now sitting at extreme fear levels near 20, rising volatility metrics, and yen-driven liquidity shifts across global markets. For investors, disciplined risk management will be crucial, but these cross-market dynamics ultimately support deeper liquidity, stronger institutional participation, and continued innovation across the broader crypto ecosystem," Ignacio Aguirre, CMO at Bitget, told Khaleej Times.

Fed Chair Jerome Powell's neutral pivot has set the stage for a more mature crypto market, said Gracy Chen, CEO at Bitget. "We view Chair Powell's suggestion that the Fed may pause rate cuts after December as a prudent, data-driven signal that supports a more stable macro backdrop. By reducing policy uncertainty, this shift helps lay the foundation for stronger long-term crypto adoption, since markets tend to build conviction when monetary direction is clearer. A move toward a more "neutral" stance also encourages traders to position defensively, favoring blue-chip assets like Bitcoin while being more selective with speculative altcoins.," Chen told Khaleej Times.

In the near term, liquidity flows may moderate as risk assets recalibrate, yet that cooling period often opens the door for institutional participation. Regulated venues such as Bitget stand to benefit from this shift, as deeper market infrastructure and compliance-aligned products become more attractive to professional investors seeking stability and scale. "Overall, Powell's tone reinforces crypto's growing alignment with traditional financial cycles. As policy normalizes and institutional engagement expands, the industry is well positioned to develop more innovative products, deepen liquidity, and accelerate broader ecosystem growth heading into 2026," Chen said.

Khaleej Times