Bitcoin, Ethereum, and XRP Tumble. Why Cryptos Are Slumping Today.

Bitcoin and other cryptos were plummeting on Monday. (MARVIN RECINOS/AFP via Getty Images)

Key Points

About This Summary

• Bitcoin fell 2.8% to around $112,500, trading 10% off last month’s record high, as investors unwound bullish bets.
• Ethereum and Solana both tumbled 6.7%, and XRP fell 3.6% as crypto stocks like Coinbase also took a hit.
• Deutsche Bank expects Bitcoin to climb back above $120,000 by the end of 2025, despite the recent slump.

Bitcoin and other cryptocurrencies were plummeting on Monday, as digital-asset investors unwound some bullish bets made after last week’s Federal Reserve interest-rate cut.

The world’s largest token was down 2.8% to around $112,500 over the past 24 hours, according to data from CoinDesk. It’s now trading about 10% off the record high it hit last month.

Created with Highcharts 9.0.1Sources: CoinDesk (BTC); Kraken (ETH, SOL,​XRP)

Created with Highcharts 9.0.1BitcoinXRPEthereumSolanaSept. 21Sept. 22-9-8-7-6-5-4-3-2-1012%

Other cryptos were slumping, too. Ethereum and Solana both tumbled 6.7%, and XRP fell 3.6% over the past 24 hours, per data from the Kraken crypto exchange.

Crypto stocks also took a hit from the selloff. Bitcoin investor Strategy dropped 2.6% and digital-asset exchange Coinbase Global fell 3.4% in afternoon trading. The benchmark S&P 500, however, was up 0.4% and on track to hit another new all-time high.

The crypto slump likely reflects a buildup of excess leverage in the aftermath of Thursday’s Fed decision, Kaiko head of research Adam Morgan McCarthy told Barron’s.

“Funding rates seem to have risen since last week’s Fed meeting, suggesting some speculation occurred after the cut,” he said.

“There was excess leverage from those speculative bets and the slight decline earlier triggered some liquidations that had a cascading effect,” he added.

The Fed cut rates by a quarter point on Thursday, which was the first time it had lowered borrowing costs in 2025. But Chair Jerome Powell labeled the decision a “risk-management cut,” suggesting the central bank will move cautiously rather than aggressively easing monetary policy.

Still, the longer-term outlook for digital assets looks solid, with tokens surging this year thanks to U.S. lawmakers passing a slew of crypto-friendly regulations. Deutsche Bank strategist Marion Laboure said in a research note published Monday that she expects Bitcoin to climb back above $120,000 by the end of 2025.

Write to George Glover at george.glover@dowjones.com