Bitcoin's Price Collapse | CDO Unwind Sparks Institutional Concerns
Edited By
John Carter
As Bitcoin tumbles to a confirmed liquidity floor of $22k to $28k, institutional investors face a crisis. Analysts warn that a series of cascading failures could mirror the catastrophic events seen in 2008.
Shocking Price Plunge
On November 29, 2025, Bitcoin is priced at $90,809 after experiencing a sharp decline. Daily closes have sunk below critical levels for the first time since March 2024, raising alarms among industry experts. One analyst noted, *"This is not just a hiccup, but a full-stack failure of the crypto asset class."
Decaying Market Structure
Critics suggest that Bitcoin has devolved into a synthetic collateralized debt obligation (CDO) model, lacking fundamental cash flows. A staggering $1.5 to $2 trillion is necessary to lift prices back to $180k, a fantasy given current interest rates hovering around 5 to 6 percent.
"The halving model isn’t mathematically dead, but it’s evolving—just like the market,” explained a panelist discussing the structural changes in crypto.
Miner Capitulation
The miner industry is witnessing its second capitulation phase, with hash prices falling to an all-time low. Public miners, such as Marathon Digital Holdings and Riot Blockchain, have reported severe financial strains, indicating that they are burning 40% to 60% of their monthly revenue on electricity and debt service.
One comment highlighted, "This looks more like a bear trap than anything else." There’s growing skepticism about the veracity of forced selling claims against firms like MicroStrategy, which allegedly holds convertible debt instead of traditional margin loans.
ETF Outflows and Liquidity Issues
November saw significant outflows from Bitcoin ETFs, with a reported net outflow of $11.3 billion marking the first reversal since October. Many expect a spiraling effect, leading to substantial redemptions and further liquidity challenges.
The sentiment in many user boards paints a grim picture, with concerns over liquidity drying up below $80k. *
A Shift in the Crypto Landscape Ahead
Looking into the near future, the landscape for Bitcoin appears uncertain. Experts estimate there’s a 70% chance of a further decline, particularly if liquidity remains below the $80k threshold. Institutional investors might scale back their exposure amidst rising interest rates, compounding the selling pressure. The ongoing miner capitulation, characterized by significant financial strain in public mining operations, could push hash rates lower, risking further supply chain disruptions. Meanwhile, ETF outflows suggest broader sentiment shifts; an additional exodus could trigger a cascade effect, leading prices to test the lower liquidity limits of $22k to $28k in the coming months.
A Lesson from the Spanish Flu
In a seemingly unrelated context, the Spanish Flu pandemic of 1918 provides an intriguing parallel. After the initial wave of illness subsided, businesses faced a harsh economic reality that mirrored what we see today in the crypto market. Recovery took time, with many firms adjusting to new economic conditions, which required substantial shifts in strategies to survive. Just as businesses navigated the fallout from the pandemic, crypto investors and miners may need to adapt their approaches to withstand the shifting tides and emerge stronger amid adversity. This historical reflection serves as a reminder that the key to resilience often lies in adaptability.