The news: Cryptocurrency valuations plunged across the board from frothy October highs, per Coinmarketcap data.

• Bitcoin’s value briefly hit as low as $80,553 on Friday, down from an all-time high of $126,000 in October.
• Ether’s value has fallen more than 40% since its October record to below $2,800.
• XRP’s value slid below $2, down from a recent high of $3.50.

Other crypto also fell deep in the red.

What happened: Crypto valuations are plunging after a record rise in the Bitcoin market in early October—fueled by everything from across-the-board market enthusiasm for risky assets and an outspokenly pro-crypto president in the White House. Since then, Bitcoin has lost nearly a quarter of its valuation—November has suffered the largest single-month drop since June 2022, per Bloomberg data.

Broader anxieties around market froth and fears that tech valuations are propped up by unsustainable AI investments have hit the crypto market particularly hard. Realized losses are crescendoing to levels not seen since the dramatic collapse of crypto exchange FTX as fears that prices have far lower to go compel holders to sell off their assets.

Why this matters: Chaos in the crypto market makes it harder for crypto proponents to coax consumers into using it for payments. Players like Block, Shopify, PayPal, and Stripe all want to bring retail crypto acceptance into the mainstream—a difficult sell when valuations gyrate so wildly. Few SMBs likely want to be paid in something that could lose as much as 20% of its value in a month. 

With merchants wary, consumers are unlikely to choose crypto as their payment of choice: payees typically only pay by crypto when requested by their seller, per Kansas City Fed data.

Our take: Crypto volatility scares consumers and dampens consumer interest even in relatively safer types of crypto like stablecoins, which have practical applications for cross-border payments. 

Stablecoin services need to educate their consumers about the safety of their products, especially as other non-fiat-backed tokens hemorrhage value, to assure clients that their crypto-powered remittances are a safe choice for sending loved ones overseas money.