Crypto investors pull $1.1tn as Trump Bitcoin boom fades
Nearly $1.1 trillion has been pulled from cryptocurrency markets in a matter of weeks as investors lose faith in Donald Trump’s bid to make the US the “crypto capital of the world”.
Bitcoin fell as low as $93,730 on Sunday after hitting a record high above $126,000 just last month, wiping nearly $580bn off the world’s largest digital coin.
At one point over the weekend it had erased all its gains this year as the market continued to reel from one of the biggest cryptocurrency crashes in history in October.
Bitcoin was languishing below $96,000 on Monday as investors were still hurting from a liquidation that wiped around $400bn (£300bn) off the value of the crypto market in a span of less than 24 hours last month.
The subsequent downturn has raised questions over Mr Trump’s bid to become the “crypto president”.
He sparked a sharp rally in the digital asset industry after his election victory in November last year, but the president has faced accusations that he has used his position to enrich his family and associates.
Stephen Innes of SPI Asset Management said that “a month after its euphoric highs, Bitcoin’s Trump-trade sugar rush faded”.
He said “crypto feels like a passenger — not a driver” as global markets are unnerved by the impending deluge of data on the American economy.
Federal departments will begin to publish delayed economic figures after the record US shutdown. Closely watched payrolls figures will be released on Thursday.
Nvidia, the world’s most valuable company, will also publish its third quarter results on Wednesday, which will be examined for signs of a bubble in the artificial intelligence (AI) industry.
“The sentiment in crypto retail is pretty negative,” Matthew Hougan, chief investment officer at Bitwise Asset Management told Bloomberg.
“They don’t want to live through another 50pc pullback. People are front-running that by stepping out of the market.”
03:26pm
Above average increases to the national living wage are “a pig in the python” for businesses digesting labour costs, says a Bank of England rate setter.
Catherine Mann, a member of the Bank of England’s Monetary Policy Committee (MPC) said companies were “still digesting” several years of above average increases to the national living wage.
She told an event held by King’s Business School: “Even if there were only one year of a NLW [national living wage] above average, you would have a pig in the python situation where it gets digested, but there’s been three years now.”
“There have been several pigs, sequential pigs, in the wage python and that has had an implication for wages.”
In April the national living wage rose 6.7pc to £12.21 per hour, causing an increase in labour costs for many companies.
The cost of employing staff was also pushed higher following a hike to employers’ national insurance contributions, announced in the Chancellor’s maiden Budget last year.
Businesses have warned the rapid rise in labour costs has caused them to hike prices, increasing inflation for consumers.
Ms Mann said survey data from the Bank of England’s decision maker panel showed that many firms had increased prices, recorded lower profit margins, cut staff or reduce employee hours following the increase in employers’ NICs and the national living wage.
She said: “Pretty much no firm does nothing in the end, you have to adjust one way or another.”
03:15pm
The pound steadied after the turmoil at the end of last week caused by Rachel Reeves’s U-turn on raising income tax.
Sterling was flat against the dollar at $1.316 and rose 0.2pc versus the euro to €1.136.
It had suffered its worst day against the single currency in two years on Friday after the Chancellor alarmed investors with her about-turn on raising the tax to balance the public finances.
Kit Juckes at Societe Generale said despite the latest rise, the pound “over time it looks distinctly vulnerable” against the euro.
02:34pm
Stocks sank as trading started on Wall Street amid worries about what delayed data on the US economy will show after the record-breaking federal shutdown.
The Dow Jones Industrial Average fell 0.3pc to 47,018.29 while the benchmark S&P 500 declined by 0.2pc to 6,717.87.
The tech-heavy Nasdaq Composite dropped by 0.2pc to 22,860.56.
02:17pm
The global market value of the cryptocurrency sector has fallen again today as confidence remains weak.
The market cap of digital assets has fallen 1.7pc to $3.3tn, according to CoinGecko. Bitcoin is down 1.6pc in the last 24 hours to less than $94,000.
Analysts at World Gold Council said Bitcoin “has seen a more decisive fall”, with market indicators warning “of a more important turn lower”.
They said this “may well augur a further broader ‘risk off’ tone” among investors, meaning confidence could fall even more.
01:49pm
White House economic adviser Kevin Hassett said there have been mixed signals in the jobs market ahead of a deluge of data delayed by the US government shutdown.
Mr Hassett, who is in the running to be the next chairman of the US Federal Reserve, said the labour market could be slowing down.
A weakening jobs market could prompt the Fed to again lower its key interest rate by a quarter of a percentage point next month, economists say. Officials last week appeared to dampen expectations of another rate cut in December.
Official figures will begin to be released again this week after the record 43-day US shutdown, with the crucial non-farm payrolls report released on Thursday.
“I think that there have been mixed signals in the job market and really, really positive signals in the output markets,” Mr Hassett told CNBC.
“I think that there could be a little bit of almost quiet time in the labour market because firms are finding the AI is making their workers so productive that they don’t necessarily have to hire the new kids out of college.”
01:40pm
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Picking apart the annual John Lewis Christmas TV advert has become as much a part of the festive build-up as decorating the tree.
While the release of each campaign heralds the beginning of the seasonal spending binge, John Lewis has always been more concerned with tugging on the nation’s heartstrings than promoting actual products.
Past efforts have included the heart-wrenching “Man on the Moon” advert featuring a young girl making contact with an old man on the Moon and lovable characters from “Buster the Boxer” to “CGI dragon Excitable Edgar”, usually accompanied by atmospheric acoustic pop covers.
But by its own standards, this year’s offering – in which a son opens up to his father with the gift of a single vinyl record – is a more muted affair.
It’s not just John Lewis that’s taking a pared-down approach to Christmas. Asda’s festive ad features a shopped-out Grinch bemoaning the soaring price of Christmas trees and gifts.
01:11pm
UK stocks edged lower at the start of a week filled with crucial economic data releases.
The blue-chip FTSE 100 slipped 0.3pc, putting it on track for its third consecutive session of losses. The mid-cap index FTSE 250 fell 0.5pc, leaving it poised for its fourth straight day of decline.
The main indexes fell sharply on Friday after reports that Rachel Reeves performed a U-turn on her planned income tax increase, which drove bond yields higher.
Inflation figures will be released later this week, which could be crucial to whether the Bank of England cuts interest rates next month.
Banks such as Barclays, HSBC and Standard Chartered were collectively down 0.8pc after the turmoil in bond markets.
Advertising group WPP rose 5.6pc to lead the FTSE 100 after drawing takeover interest from French rival Havas and private equity firms Apollo and KKR, according to The Times.
12:43pm
Wall Street’s main indexes lacked direction in premarket trading ahead of results from AI chip giant Nvidia and the return of official US statistics after the federal shutdown.
Google-parent Alphabet gained 5.6pc ahead of the opening bell after Berkshire Hathaway revealed a new $4.3bn stake in the company and further reduced its stake in Apple.
Nvidia’s shares inched 0.4pc higher ahead of its quarterly earnings after markets close on Wednesday. The company has been a bellwether for AI-related stocks that have propped up several tech names in this year’s Wall Street rally.
With the longest government shutdown in US history officially ending last week, key data releases from government agencies are expected in the next few days.
The much-delayed September jobs report will also be released on Thursday, but may do little more than confirm earlier private market surveys showing the labour market had slowed.
In premarket trading, the Dow Jones Industrial Average was flat, the S&P 500 was up 0.1pc and the Nasdaq 100 was up 0.2pc.
12:27pm
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Jeff Bezos, the billionaire Amazon founder, is returning to business with a $6.2bn (£4.7bn) artificial intelligence (AI) company called Project Prometheus.
Mr Bezos will be co-chief executive of the AI start-up that plans to use the technology to improve the manufacturing of computers, aerospace parts and cars.
It is the first chief executive role for Mr Bezos since stepping down as Amazon boss four years ago.
11:56am
Bitcoin has been hit by a wider sell-off in markets fuelled by the Federal Reserve’s hints that it may not cut interest rates again next month, analysts have said.
Bitcoin has fallen around a quarter from its record high above $126,000 in October and was dragged down 9pc last week.
Fed chairman Jerome Powell cash doubt on another reduction in borrowing costs last month, while several of his fellow governors also dampened hopes for a rate cut during subsequent speeches.
Henry Allen of Deutsche Bank said investors should not “underestimate the impact” of the change in stance from the Fed in recent weeks.
“If we look at the biggest multi-asset sell-offs of the last decade, a consistent theme has been the Fed adopting a more hawkish posture and turning to rate hikes,” he said.
“We saw that in 2015-16, 2018, and 2022, with the latter seeing one of the biggest combined bond-equity sell-off ever.
11:23am Key moments
Nearly $1.1 trillion has been pulled from cryptocurrency markets in a matter of weeks as investors lose faith in Donald Trump’s bid to make the US the “crypto capital of the world”.
Bitcoin fell as low as $93,730 on Sunday after hitting a record high above $126,000 just last month, wiping nearly $580bn off the world’s largest digital coin.
At one point over the weekend it had erased all its gains this year as the market continued to reel from one of the biggest cryptocurrency crashes in history in October.
Bitcoin was languishing below $96,000 on Monday as investors were still hurting from a liquidation that wiped around $400bn (£300bn) off the value of the crypto market in a span of less than 24 hours last month.
The subsequent downturn has raised questions over Mr Trump’s bid to become the “crypto president”.
He sparked a sharp rally in the digital asset industry after his election victory in November last year. However, tokens like his Trump memecoin have endured wild swings, establishing a $9bn valuation just days after its January launch, but falling back to a $1.1bn market capitalisation today.
Stephen Innes of SPI Asset Management said that “a month after its euphoric highs, Bitcoin’s Trump-trade sugar rush faded”.
He said “crypto feels like a passenger — not a driver” as global markets are unnerved by the impending deluge of data on the American economy.
Federal departments will begin to publish delayed economic figures after the record US shutdown. Closely watched payrolls figures will be released on Thursday.
Nvidia, the world’s most valuable company, will also publish its third quarter results on Wednesday, which will be examined for signs of a bubble in the artificial intelligence (AI) industry.
“The sentiment in crypto retail is pretty negative,” Matthew Hougan, chief investment officer at Bitwise Asset Management told Bloomberg.
“They don’t want to live through another 50pc pullback. People are front-running that by stepping out of the market.”
10:42am
The value of the pound was little changed after traders’ whirlwind day at the end of last week following Rachel Reeves’ income tax U-turn.
Sterling was flat against the dollar at $1.317 after declining by 0.4pc on Friday. It rose by 0.1pc versus the euro at €1.135.
World currency markets have started the week in a cautious mood in what could be a busy week with the long-awaited return of US economic data.
The focus this week will be on various data releases delayed by the federal shutdown, with the closely watched September nonfarm payrolls figures due on Thursday.
Goldman Sachs currency analysts said: “Even though the shutdown has come to an end, it will naturally take some time for data to be relevant again.
“Thursday’s payrolls report for example will be a snapshot from two months ago, and therefore unlikely to settle any debates about the outlook.”
10:16am
The EU has cut its eurozone growth forecast for next year as it grapples with Donald Trump’s tariffs.
The European Commission expects GDP to grow by 1.2pc in 2026, down from a previous forecast of 1.4pc.
Brussels also forecast that eurozone inflation will hit 1.9pc in 2026, up from the previous prediction of 1.7pc for next year.
Valdis Dombrovskis, the EC’s economy commissioner, said: “Even in an adverse environment, the EU’s economy has continued to grow.
“Now, given the challenging external context, the EU must take resolute action to unlock domestic growth.”
09:55am
Google owner Alphabet is on track to jump when trading begins later on Wall Street after Berkshire Hathaway disclosed a stake in the tech giant.
Shares rose 5.5pc in premarket trading after details emerged of the investment which could be one of the final major moves by the conglomerate under the leadership of Warren Buffett.
A filing on Friday showed that Berkshire owned 17.85 million shares in Google’s parent as of September 30. As of the stock’s last close, the stake would be worth $4.93bn.
Berkshire’s move comes amid growing concerns over Big Tech’s heavy AI spending that intensified after Michael Burry, known for “The Big Short”, shut down his hedge fund last week following his recent criticism of leading AI companies.
Mr Buffett is ending his 60-year run as chief executive officer of Berkshire Hathaway at the end of 2025. He will be succeeded by Greg Abel.
It was unclear whether Buffett, his portfolio managers Todd Combs and Ted Weschler or Abel made the specific purchase, though Buffett typically oversees the larger investments.
At Berkshire’s annual shareholder meeting in 2019, Buffett and late vice chairman Charlie Munger lamented not investing in Google sooner. “We screwed up,” Munger said.
Berkshire has traditionally steered clear of tech stocks, with Mr Buffett arguing that Apple, its largest stock holding, is a consumer-products company rather than a technology bet.
09:39am
The cost of government borrowing was little changed today following the sharp surge triggered by Rachel Reeves’s U-turn on raising income tax.
The yield on 10-year UK gilts – a benchmark for the return the Treasury offers to buyers of its debt – edged down to 4.55pc in early trading.
On Friday, it had surged by the most since July when the Chancellor made her tearful appearance in the Commons.
The two-year gilt yield, which is sensitive to the outlook for interest rates, fell three basis points to 3.8pc.
09:19am
Shares were mixed in Asia overnight after the sharp downturn in stocks at the end of last week.
Tokyo’s Nikkei 225 fell 0.1pc to 50,323.91 after the government reported that the Japanese economy contracted at a 1.8pc annual pace in the third quarter.
Chinese markets also slipped, as Hong Kong’s Hang Seng shed 0.7pc to 26,384.28. The Shanghai Composite index declined 0.5pc to 3,972.03.
Geopolitical tensions have also hurt sentiment as relations between China and Japan have deteriorated. Prime Minister Sanae Takaichi had suggested that a Chinese move against self-governing Taiwan could prompt a Japanese military response.
China objects to other countries’ involvement in Taiwan, which Beijing claims as its own. The Chinese government has warned its citizens not to travel to Japan or study there.
In South Korea, the Kospi gained 1.9pc to 4,089.25 on buying of tech-related shares. Computer chip makers have rallied after they formed plans with industry leader Nvidia to cooperate in developing artificial intelligence, with SK Hynix surging 8.2pc on Monday and Samsung Electronics up 3.5pc.
Australia’s S&P/ASX 200 was nearly unchanged at 8,636.40.
In Taiwan, the Taiex picked up 0.2pc, while India’s Sensex gained 0.3pc.
On Friday, US stocks ended the week mixed after one of Wall Street’s worst drops since the tariff sell-off in the spring.
09:04am
The FTSE 100 was flat in early trading after the Chancellor’s U-turn on raising income tax triggered its worst day in seven months.
The UK’s flagship stock index was little changed at 9,698.32, although the domestically focused FTSE 250 declined by 0.2pc to 21,779.74.
The FTSE 100 plunged by 1.1pc on Friday on its worst day since Donald Trump’s liberation day tariff onslaught in April. Markets were upended as it emerged Rachel Reeves will likely not go ahead with an increase in income tax.
European shares were mixed as investors prepared for a deluge of long-awaited data this week from the US, after official figures were paused by the federal shutdown.
The pan-European Stoxx 600 was flat, the Cac 40 in Paris was down 0.1pc and the Dax in Frankfurt edged up 0.1pc.
Nvidia, the world’s most valuable listed company, will also publish its highly anticipated third quarter results after markets close on Wednesday.
The earnings report will likely have a bearing on the questions of whether stock valuations are in an AI-fuelled bubble.
08:51am
Thanks for joining our live coverage today. Here is what you need to know to get your started.
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Reeves weighs fresh crackdown on watchdogs in push for growth | Chancellor has described regulators as ‘a boot on the neck’ of businesses
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NHS faces ‘doom loop’ without AI, says Blair’s son | Euan Blair’s Multiverse announces major tie-up with US data giant Palantir
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Wizz Air slashes flights from Gatwick in scramble to cut costs | Airline is moving its planes to Luton as part of a Europe-wide shake-up
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Labour warned property tax will push up cost of family homes | Rising fears the Chancellor will target upmarket properties in Nov 26 Budget
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Roger Bootle | At last we could be seeing the real fruits of the AI bonanza
08:46am Key moments
Britain’s economy has suffered a slowdown as speculation around the Budget made people too fearful to spend, according to a former chief economist at the Bank of England.
Andy Haldane said the UK had been hit by a “circus of speculation” about what taxes Rachel Reeves plans to raise next week.
Britain’s economy grew by 0.1pc in the third quarter, below economists’ expectations and down from 0.3pc recorded in the previous three months.
The official figures were published a day before it emerged that the Chancellor had performed a U-turn on plans to raise income tax in the Budget.
She is instead expected to freeze tax thresholds after receiving better-than-expected forecasts from the Office for Budget Responsibility (OBR).
Numerous reports have also suggested the Chancellor is considering a “mansion tax” and a raid on pensions.
“One of the reasons we had a very weak growth number last week is because that Budget speculation has dampened people’s willingness to spend,” Mr Haldane told Sky News.
“First and foremost, we need to stop that speculation.
“If you speak to businesses and consumers, their fearfulness about where the axe will fall is causing them, not unreasonably, to save rather than spend.”
He added: “The process has become far too elongated and far too leaky, to be honest. We have this pretty much daily speculation about the next tax rise and we need to re-engineer that process to either make it watertight like the Bank of England’s monetary policy decisions, or a genuinely open consultation. Right now we have this halfway house of leaks and speculation which serves absolutely no-one, least of all the economy.”
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