The opening of Asian markets on December 1, 2025, painted a stark picture of diverging risk appetites. While major regional equity indices found a mixed but supported footing, Bitcoin extended its brutal November decline, breaking below the $86,000 level to trade near $85,800. This split-screen performance underscores a market recalibrating around central bank expectations, where traditional assets and cryptocurrencies are reacting to very different sets of pressures.
Bitcoin’s Perfect Storm of Pressures
Bitcoin’s sharp descent, which saw it fall as much as 6% in early Asian trading, was fueled by a confluence of crypto-specific headwinds that overwhelmed any positive macro sentiment.
The immediate catalyst was a security incident at the decentralized finance platform Yearn Finance, where an exploit in a liquidity pool led to an estimated $9 million loss. This event triggered fresh panic in a market already on edge, accelerating a sell-off that liquidated over $400 million in leveraged futures positions—most of them bets on higher prices.
Beneath this event-driven shock lie deeper structural worries. Institutional demand, a key pillar of the 2024-2025 rally, has markedly weakened. U.S. spot Bitcoin ETFs witnessed substantial net outflows in November, reflecting a lack of new buying interest from major funds. Analysts point to “extremely low” ETF inflows and a worrying absence of buyers on price dips as the market’s core concern. This was compounded by comments from Phong Le, CEO of the corporate Bitcoin giant Strategy Inc., who suggested the company could consider selling some of its massive holdings under specific financial stresses, raising fears of potential selling pressure from a major market whale.
Equities Buoyed by the Fed’s Dovish Shift
In contrast, Asian equities navigated the session with relative resilience, drawing support from a shifting macroeconomic landscape. The dominant narrative was growing conviction that the U.S. Federal Reserve will cut interest rates at its upcoming December meeting, with market-implied probabilities soaring as high as 87%. This expectation of cheaper money and sustained liquidity acts as a classic support for risk assets like stocks.
Consequently, regional markets traded on their own merits. Japan’s Nikkei 225 fell 1.9%, weighed down by a potential policy divergence as the Bank of Japan hints at raising rates, which would tighten local liquidity. Meanwhile, Hong Kong’s Hang Seng Index rose 0.8%, and mainland China’s benchmarks also gained ground, seemingly finding enough optimism in potential domestic support and the global easing outlook to offset concerns over weak manufacturing data. Other major indices in South Korea, Australia, and India saw modest movements.
Navigating the Divergence
For traders and portfolio managers, this divergence delivers a clear lesson: in the current climate, macroeconomic trends and asset-specific risks are decoupling. While equities are collectively breathing a sigh of relief at the prospect of a more accommodative Fed, the cryptocurrency market is being judged—and sold—based on its own internal vulnerabilities. These include persistent security frailties, fading institutional enthusiasm, and the looming threat of large-scale disposals by early investors.
The path forward for both asset classes now hinges on forthcoming catalysts. For equities, all eyes are on the Federal Reserve’s December decision to confirm the dovish pivot. For Bitcoin, the battle is to defend the $80,000 support level that analysts have pinpointed as critical . A breach below that level could signal a deeper correction, while holding above it may suggest the current storm is a cleansing pause within a longer-term trend.
