Why is Crypto Crashing on Dec 24: Reasons and Recovery Hint Explained

Why is Crypto Crashing Today: Gold, Fed Fears and Recovery Signals

Why is crypto crashing today, and why does this pain feel so much harder?

The month of December 2025 has been tough for investors, with the global crypto market cap dropping by 1.14% at a value of $2.94 trillion, sliding below the $3 trillion cap level for the second time this month. The trading volume also dropped, standing at $109 billion. With Bitcoins and Ethereum down and funds flowing globally in other directions, one question on everyone’s lips is: Why is market down today? Is the worst over?

Why is Crypto Crashing Today: Gold or Fed Behind?

Gold Price Rally Pulls Capital Away From Digital Assets: One major reason why is crypto crashing is the unstoppable rise of gold. Spot gold surged past $4,500 per ounce, making it a $31.5 trillion asset, according to The Kobeissi Letter. That is nearly seven times larger than Nvidia.

Source: The Kobeissi Letter

Silver also crossed $70, reinforcing the move toward traditional safe havens. With the strengthening of gold, the digital assets markets lose steam, which is why it is down even though there haven’t been any failures in protocols.

Fed Rate Cut Fear and Trump Fed Chair Pick Add Pressure: Another reason for which crypto is crashing today is because of increasing fears over US monetary policies. The Fed meeting slated for January 28, 2026, is making everyone nervous. The odds from Polymarket for no rate cut are 86%.

Source: Polymarket Website

Adding further uncertainty was Trump announcement of Fed chair. Trump said that he wants leaders of the Fed who share his opinions, making many fearful of their policy independence. This is why is market down today.

Bitcoin Price Drops $87,000, Ethereum Price Crash Follows: The sell-off escalates after Bitcoin price dips below $87000 having breached the psychological level. Bitcoin currently trades close to $86,815, while Ethereum price crash sees ETH fall below $2,900 and now trades at $2,924.

Source: CoinMarketCap 

In the past, when Bitcoin loses strength, altcoins usually follow. This has been responsible for why there is a crashing across the board yet there has been no panic-selling.

Can the Crypto Market Recover Again?

Whales move despite the fear. A whale has accumulated 40,975ETH ($121M) in only five hours. Starting from November 4, there has been a whale accumulating 569,247ETH ($1.69B) using borrowed money from Aave, according to Lookonchain.

However, Bitmine, spearheaded by Tom Lee, acquires 67,886 ETH worth approximately 201M USD, while further weakening rivals in leveraged bets from Fasanara Capital. This reflects market confidence beyond market chatter.

Conclusion

Thus, the question remains, Why is crypto crashing today? The rising prices of gold, uncertainty of the Fed, political pressures, and sharp drops in Bitcoin prices all contribute to the fear. However, institutional purchases imply that there is hope for the future.

YMYL Disclaimer: This article is intended to be informative in nature and should not be considered investment advice. The cryptocurrency market is highly volatile. Readers should do their own due diligence and consult appropriately qualified investment professionals.