I woke up, grabbed my coffee, and the first thing I saw was Bitcoin bleeding red. Down more than 5% before most people even hit snooze a second time. For a moment I thought my phone had frozen on last month’s chart. Nope. Welcome to December 2025.
There’s something almost poetic about crypto deciding to throw a tantrum on the very first trading day of what’s historically the strongest month for stocks. It’s like showing up to a holiday party already drunk and knocking over the Christmas tree. Everyone feels it.
A Classic Risk-Off Morning in the Making
By 9:19 AM ET the damage was clear. Bitcoin had sliced straight through the psychological $90,000 level that traders had been defending like it was the Alamo. Stock futures followed the leader lower: Dow futures off 220 points, S&P 500 futures down 0.7%, Nasdaq-100 futures shedding almost 1%. Not catastrophic on paper, but the tone felt heavier than the numbers suggested.
Gold, meanwhile, was having the exact opposite morning. Futures jumped roughly 1% toward $4,300 an ounce, reminding everyone why it still earns the “safe-haven” label when risk assets get the jitters. The VIX — that lovely little fear gauge we all love to hate — climbed toward 18. Nothing apocalyptic, but definitely enough to make margin desks sweat a little.
“Stocks are kicking off the final month of the year under a bit of pressure as crypto takes a dive, the Bank of Japan keeps hinting at a December hike, and China’s PMIs came in softer than a wet noodle.”
— Market strategist Adam Crisafulli, Vital Knowledge
Why Does Crypto Still Move Everything?
Seriously, think about this for a second. An asset class that didn’t even exist fifteen years ago now has the power to yank $2 trillion traditional indices around on a random Monday morning. I’ve been in this game long enough to remember when a 5% Bitcoin move barely registered on CNBC’s ticker crawl. Times have changed.
Part of it is simple correlation. Retail traders who piled into Bitcoin and MicroStrategy last month are the same crowd rotating into Nvidia, Tesla, and the Magnificent Whatever. When they puke one, they often puke them all. Part of it is narrative. Crypto has become the ultimate barometer of risk appetite — more sensitive than high-yield spreads, more visible than small-cap breadth.
And honestly? I don’t hate it. At least we all know where we stand. When Bitcoin is ripping to new highs, nobody pretends we’re in a bear market. When it rolls over like this, nobody pretends “everything is fine.” Brutal transparency beats polite fiction every day of the week.
December’s Stellar Historical Reputation
Here’s the part that makes today’s price action deliciously ironic. Since 1950, December ranks as the third-best month for the S&P 500 with an average return north of 1%. Only April and July have treated investors better over seven decades.
Even better, the “Santa Claus rally” — the last five trading days of the year plus the first two of January — has been positive 79% of the time. We’re talking a track record most hedge fund managers would sell their soul to match.
- Average December gain (1950–2024): +1.3%
- Positive Decembers: 73% of the time
- Santa Claus rally success rate: 79%
- Best December on record: +8.7% (2010)
So yeah, starting the month with a Bitcoin face-plant feels… off-brand, to put it mildly.
Was November Just a Head-Fake?
Let’s rewind thirty days. November was weird. The S&P 500 scraped out a tiny gain, but it spent most of the month looking like it wanted to roll over and die. Mega-cap tech — especially anything with “AI” whispered in the same sentence — acted as a 500-pound anchor. Breadth was trash. Small-caps got crushed.
Then, almost out of nowhere, last week happened. The S&P jumped 3.7% — its best weekly performance since May. Bulls started pounding the table about rotation, reflation, animal spirits making a comeback. Bitcoin closed November above $98,000 like it was no big deal.
And now this morning’s hangover. Classic market whiplash.
Possible Catalysts Behind the Move
Nobody rings a bell, but a few things probably contributed to the sour mood:
- Profit-taking after Bitcoin’s parabolic run from $69k to $99k in six weeks
- Weekend leverage flush — perpetual funding rates were extremely elevated
- China’s manufacturing PMI missing estimates two months in a row
- Bank of Japan officials sounding increasingly hawkish about a December rate hike
- Simple mean-reversion after an overbought rally
Pick your poison. Or maybe it’s all of the above. Markets rarely give us the courtesy of a single tidy narrative.
What History Says About Early-Month Weakness
Here’s a stat that might calm some nerves: when the first trading day of December is negative, the rest of the month still finishes higher roughly 65% of the time. Not overwhelming, but better than a coin flip. And the average return in those scenarios is actually slightly higher than when December opens strong. Go figure.
Another angle I watch is positioning. Heading into this week, hedge-fund equity exposure was near all-time highs and retail sentiment on social media was frothy. A quick washout can sometimes be the best thing that happens to a tired rally.
How I’m Thinking About Positioning Right Now
Full disclosure — I trimmed some growth names last week when the Nasdaq hit new highs on light volume. Not because I’m bearish, but because I’ve been doing this long enough to know that when Bitcoin starts printing 10% daily candles, the bill eventually comes due.
That said, I’m not rushing to the bomb-shelter button either. Cash levels across most sentiment surveys are still low, seasonality is strong, and corporate buybacks tend to kick into high gear this month. If we get a proper 5–8% pullback, I’ll probably be a buyer of quality — both in crypto and equities.
Bitcoin under $85k would start to look attractive again. S&P 500 around 5,600–5,650 would flip my stance from cautious to constructive. Until then, I’m happy staying patient.
The Bottom Line
One bad morning does not a bear market make. Bitcoin’s drop below $90,000 stings, no question, but we’ve seen this movie before. Sharp crypto drawdowns in November/December have actually preceded some of the strongest equity finishes in recent cycles — think late 2020, late 2021.
Could this time be different? Always. But betting against December seasonality after a single ugly session feels like fighting seventy-five years of data with nothing more than a bruised ego.
So take a breath. Maybe even buy a little if your risk tolerance allows. The calendar still says it’s December, and history is still favors the bulls, and volatility — while uncomfortable — is often the price we pay for above-average returns.
See you on the other side of this dip.
