Bitcoin rout picks up steam as investors fret over a new ‘crypto winter’

Bitcoin tumbled more than 6% on Monday, its biggest one-day drop since March. The world’s largest digital currency traded at $85,468 as of 4 p.m. Eastern time in New York, and is down more than 30% from a peak above $126,000 set in early October. The selloff has spilled into other digital coins, including ether and solana, and pulled down stocks tied to the crypto market such as exchange operator Coinbase Global and Strategy, Michael Saylor’s bitcoin-accumulation company.
Bitcoin and other digital tokens have been caught up in a broader decline afflicting riskier trades across all markets. Unprofitable technology businesses, speculative shell companies and meme stocks have all fallen out of favor in recent months. Investors are dialing down their risk exposure as they turn more pessimistic about the market and the economy, said Patrick Horsman, chief investment officer at crypto-treasury firm BNB Plus.
"I think we could see bitcoin get all the way back to $60,000," Horsman said of bitcoin. “We don’t think the pain is over."
Powerful rallies and stomach-churning downturns have been a part of the crypto industry since its earliest days. In previous “crypto winters," bitcoin and other prominent digital assets lost as much as 80% of their value before turning around. Each of the previous cycles, including the 2022 winter, was triggered in part by investors’ concerns for widespread fraud.
The absence of a new Mt. Gox or FTX—crypto businesses whose implosions helped trigger broader market crashes—is what makes the current selloff reassuring to some and harder to explain to others.
Saylor’s Strategy, the software company that pioneered the practice of selling corporate debt and stock to buy bitcoin, unveiled plans Monday that seemed to suggest a chill was in the air.
Strategy said it raised $1.44 billion through a stock sale to help ensure it can meet future dividend and debt-interest payments. The reserve should fund 12 to 24 months of its preferred-stock dividends. The company said it also bought 130 bitcoin in the past two weeks, bringing its total holding to 650,000, worth about $56 billion based on current prices.
Overshadowing that news, though, were comments Saylor made during a video presentation in which he said it was possible his company would sell some of its bitcoin and related securities if its market cap trades below the net asset value of its bitcoin holdings, a metric the industry has coined as mNAV. “We would do that because that’s in the best interest of the shareholders," he said.
Saylor’s comments came days after Strategy CEO Phong Le said in a podcast that the company could sell some of its bitcoin holdings as a “last resort." Le said the company would sell bitcoin to fund its dividend payments if its mNAV falls below one and loses access to other forms of capital.
“Now, as we are looking at bitcoin winter, as we see our mNAV compressing, my hope is our mNAV doesn’t go below one," he said. “But if we do and we didn’t have other access to capital, we would sell bitcoin."
Strategy’s shares, which had lost nearly half their value this year, fell as much as 12% Monday before paring losses. Shares closed down more than 3% to $171.42 on Monday.
Ether fell 7.6% on Monday, and has dropped 17% this year. Solana, another prominent digital token, lost about 8%.
Coinbase Global, which operates the largest U.S. crypto exchange, fell 4.8%. Circle Internet Group, an issuer of U.S. dollar-pegged stablecoin, dropped 5%.
Other crypto-treasury companies also fell. Shares of ether-stockpiling company BitMine Immersion Technologies dropped 13%, and solana-accumulation company Forward Industries declined 12%.
Write to Vicky Ge Huang at vicky.huang@wsj.com