AI Gains Wall Street Backing as Crypto Dips Below $3T

Wall Street sentiment toward artificial intelligence shifted sharply as institutional skeptics reversed course, while cryptocurrency markets faced pressure from position unwinds that briefly pushed total market capitalization below $3 trillion.

JPMorgan’s Mary Callahan Erdoes described AI as a genuine opportunity rather than hype, citing enterprise adoption driving revenue gains across sales and finance sectors.

Amazon’s $50 billion AI investment and geopolitical initiatives to expand compute power reinforced institutional confidence. However, warnings about potential overvaluation emerged alongside the optimism, prompting advisories to maintain objectivity amid market volatility.

Crypto Market Cap Drops on Risk-Off Rotation

Despite AI optimism, momentum cracked in technology markets, triggering risk-off rotation that pulled crypto below $3 trillion for the first time since April, making it the worst-performing major asset class for a third week.

Nvidia delivered exceptional earnings results, exceeding expectations, but the rally proved short-lived as markets sold into the bounce.

Multiple factors contributed to the pressure. U.S. unemployment rose to 4.4%, while December rate-cut odds fell toward 30%. Meanwhile, Japan faced JGB bear-steepening and yen weakness, raising questions about its capacity to absorb U.S. Treasuries amid thin holiday liquidity.

European and Asian markets weakened similarly. China experienced AI profit-taking alongside renewed property sector pressure. UK inflation eased into an already thin liquidity environment heading into U.S. Thanksgiving.

The crypto market cap quickly surged back to $3 trillion, gaining approximately $110 billion within 24 hours. Bitcoin dipped slightly above $87,000 after hitting $89,000, while Ethereum consolidated around $2,900.

🔥 UPDATE: THE TOTAL CRYPTO MARKET CAP HAS SURGED BACK TO $3T, GAINING AROUND $110B TODAY. pic.twitter.com/sh5KOe7WcG

— Coinwaft (@coinwaft) November 25, 2025

Crypto ETFs recorded total outflows of $55.10 million in 24 hours and $436.85 million over the past week. BlackRock’s IBIT transferred $390.74 million in Bitcoin to Coinbase during the selloff.

Sector Performance and Market Structure Shifts

Sector performance showed uniform weakness, with higher-beta areas hit hardest. Layer-2 solutions declined 14.9%, Gaming dropped 12.0%, DePIN fell 11.4%, and AI tokens decreased 10.5%. Mid and small caps also lagged broader market performance.

Core Layer-1 protocols declined 7.0% and the GMCI-30 fell 7.2%, demonstrating relatively better resilience. The selloff reflected macro-led derisking across all verticals without discrimination between sectors.

Following the initial selloff, both Bitcoin and Ethereum ETFs recorded inflows. Eleven Bitcoin ETFs showed net inflows of 807 BTC valued at $70.22 million, with Grayscale adding 1,711 BTC worth $148.93 million.

Nov 25 Update:

11 #Bitcoin ETFs:
NetFlow: +807 $BTC(+$70.22M) 🟢#Grayscale: +1,711 $BTC($148.93M)

9 #Ethereum ETFs:
NetFlow: +35,725 $ETH(+$103.75M) 🟢#BlackRock: +31,141 $ETH(+$90.43M)

5 #Solana ETFs:
NetFlow: +374,028 $SOL(+$50.87M)🟢#Bitwise: +285,372 $SOL(+$38.81M) pic.twitter.com/dzcCtC57js

— Lookonchain (@lookonchain) November 25, 2025

Ethereum ETFs demonstrated net inflows of 35,725 ETH valued at $103.75 million. BlackRock contributed 31,141 ETH worth $90.43 million to the total inflows.

According to glassnode data, a significant portion of major crypto assets are currently trading below their holders’ cost basis a sign of widespread unrealized losses across the market. Bitcoin sits with 34.91% of its supply in loss, while XRP follows closely at 36.70%.

Ethereum shows slightly deeper strain with 38.37% of supply underwater. The most affected among the top assets is Solana, with a striking 74.84% of its supply in loss, highlighting how sharply SOL holders have been impacted by the recent market downturn.

According to Wintermute, total perpetual open interest dropped from approximately $230 billion in early October to roughly $135 billion. The decline resulted primarily from long-tail deleveraging and systematic flows retreating from leveraged positions.

This shift pushed trading activity back into spot markets, where depth and liquidity maintained strength despite holiday-thinned trading conditions. Negative funding rates and net-short perpetual positions reduced the risk of further forced liquidations.

The reduced leverage environment positions the market for more orderly recoveries compared to mechanically-driven squeezes earlier in the year. Spot markets carrying primary flow typically support more stable price action when macro conditions stabilize.