Crypto markets closed November with their steepest monthly decline since February, as exchange volumes plunged to $1.59 trillion and bitcoin ETFs hemorrhaged $3.48 billion in net outflows.
The sector-wide retreat accelerated Monday when Bitcoin crashed below $86,000, wiping out over $600 million in leveraged positions and extending losses that began weeks earlier when the world’s largest cryptocurrency tumbled from its $126,251 all-time high.
Source: TradingViewTrading activity across centralized exchanges fell 26.7% from October’s $2.17 trillion, marking the weakest performance since June’s $1.14 trillion, according to The Block’s data dashboard.
Source: BlockworksBinance maintained its market lead despite recording just $599.34 billion in November volume, down sharply from October’s $810.44 billion, while Bybit captured $105.8 billion, Gate.io processed $96.75 billion, and Coinbase handled $93.41 billion.
DEXs Took the Heaviest Hit
Decentralized exchange volumes mirrored the broader pullback, dropping to $397.78 billion from October’s $568.43 billion, the lowest monthly total since June, according to DefiLlama data.
Uniswap led DEX platforms with $79.98 billion in November volume, down from $123.88 billion the previous month, while PancakeSwap processed $70.57 billion, down from $102.02 billion in October.
The DEX-to-CEX volume ratio slipped to 15.73% in November from 17.56% in October, signaling a continued shift toward centralized exchanges amid deteriorating market conditions.
Bitcoin’s price action drove the volatility, with the crypto dropping from around $110,000 at the month’s start to a low near $81,000 on Nov. 21 before recovering slightly.
Monday’s Asian trading session brought renewed pressure, with bitcoin plunging 6% to $85,616, extending the drawdown from October’s peak to 32%.
The selloff liquidated $564.3 million in long positions, with bitcoin accounting for $188.5 million and ether contributing $139.6 million, pushing total market liquidations past $641 million across both short and long positions.
BOJ Rate Hike Expectations Trigger Carry Trade Unwind
Mounting speculation around a December rate hike by the Bank of Japan emerged as the primary catalyst for Monday’s crash.
Polymarket bettors now project a 52% chance of a 25-basis-point increase at the BOJ’s Dec. 18-19 meeting, while bond investors assign a 76% probability, according to analysts tracking Japanese yields.
“Bitcoin dumped cause BOJ put Dec rate hike in play,” said BitMEX co-founder Arthur Hayes in an X post Monday, noting that a USD/JPY rate between 155 and 160 “makes BOJ hawkish.“
Japanese two-year yields hit their highest level since 2008, while the yen’s surge intensified concerns about unwinding the massive carry trade, a strategy in which investors borrow yen to purchase risk assets like cryptocurrencies.
“An increase in Japanese base rates and strengthening of Yen leads to an unwind of the carry trade,” wrote Coinbureau CEO Nic, adding that this forces the sale of risk assets similar to August 2024, when a surprise BOJ hike triggered a 20% bitcoin crash to $49,000 and $1.7 billion in liquidations.
Reuters polling showed that 53% of economists expect a rate hike, driven by risks of imported inflation and fading political pressure to ease.
ETF Outflows Compound Market Weakness Amid Corporate Bitcoin Concerns
U.S. spot Bitcoin ETFs recorded their largest monthly outflow since February, with $3.48 billion in net withdrawals reversing October’s $3.42 billion in inflows, according to SoSoValue data.
BlackRock’s IBIT led the exodus with $2.34 billion in November outflows, including a record single-day withdrawal of $523 million on the 18th.
Despite the massive outflow, the cumulative net inflow for U.S. Bitcoin funds stands at $57.71 billion as of November 28, with $119.4 billion in net assets, representing 6.56% of Bitcoin’s total market capitalization.
Spot Ethereum ETFs also recorded their largest monthly net outflow on record at $1.42 billion, while freshly launched altcoin products bucked the trend, with XRP ETFs recording cumulative inflows of $666 million.
Additional headwinds emerged from Strategy Inc.’s disclosure that it might sell bitcoin if its mNAV ratio turns negative, as per Bloomberg.
“We can sell Bitcoin and we would sell Bitcoin if we needed to fund our dividend payments below 1x mNAV,” CEO Phong Le said Friday, adding it would be a last resort. The company’s mNAV has fallen to 1.19 from its $56 billion bitcoin stockpile.
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