Crypto prices are experiencing a rocky Monday due to poor U.S. macroeconomic data and rampant profit-taking.

Bitcoin (BTC) has dropped 1.8% in the past 24 hours to $91,800, a price not seen since Dec. 5, the day it broke through $100,000 for the first time. The largest cryptocurrency has fallen more than 14% from its Dec. 17 record of $108,278.

Ether (ETH) has lost less, falling 0.7% to $3,320, though it’s now 17% below its December highs, and still has not surpassed the record $4,820 it hit in 2021. Solana (SOL) is also proving a little stronger than bitcoin, with the SOL/BTC ratio up 0.35% today.

The CoinDesk 20 — an index of the top 20 cryptocurrencies by market capitalization, excluding stablecoins, memecoins and exchange coins — is also in the red, sliding 3.74%. Ripple (XRP) and Stellar (XRM) have taken the biggest hits, down 6% and 6.3% respectively, while the most resilient coin besides ether has been litecoin (LTC), which is 1.9% lower.

Stocks of crypto-related companies also took a hit. MicroStrategy (MSTR) and Coinbase (COIN) fell 7% and 5.3%, respectively and major bitcoin mining firms like MARA Holdings (MARA) and Riot Platforms (RIOT) have dropped more than 7%.

The selling pressure is partially caused by investors cashing out after bitcoin shot up more than 117% this year. Profit-taking currently exceeds $1.2 billion on a seven-day moving average, and while that is significantly less than the Dec. 11 peak of $4.0 billion, it’s still much more than usual. Additionally, the lion’s share of profits is being taken by investors who have held bitcoin for many years.

Macroeconomics are also weighing on the market, with the U.S. Chicago PMI — which measures the performance of the manufacturing and non-manufacturing sector in the Chicago area — flashing its lowest reading since May, suggesting an economic slowdown is underway.

Uncertainty around the Federal Reserve’s interest-rate policy going into 2025 isn’t helping, since the U.S. central bank has signaled it will pause rate cuts until at least March. The inauguration of President-elect Donald Trump, slated for Jan. 20, may also be playing a role. The S&P 500, Nasdaq, and Dow Jones are down more than 1%.

“The market exceeded expectations in 2024, but signs of exhaustion signaled the need for consolidation,” Joe Carlasare, partner at Amundsen Davis, told CoinDesk. “Looking ahead to 2025, I’m optimistic but expect the path to diverge from consensus, as markets often do. Bitcoin’s adoption continues to grow, and I anticipate it will generally move in line with traditional markets. If the U.S. avoids a significant growth slowdown, bitcoin should perform well, though the ride may be bumpier than in 2024.”

The Coinbase Chief Legal Officer Paul Grewal took to X to demand answers after learning from the AIMA survey that 75% of crypto hedge funds face issues with accessing basic banking services. None of the traditional alternative investment managers (e.g., real estate) experienced similar troubles with the banks.

The Grewal’s X post raises questions that have already been circulating in the media for quite a while. You have probably heard of Operation Choke Point 2.0 or read about the redacted documents published by Coinbase in which the Federal Deposit Insurance Corporation openly asks banks to pause all the operations associated with cryptocurrencies. The Alternative Investment Management Association (AIMA) survey report furnishes these concerns with new statistical grounds. Alongside Grewal, AIMA calls for action in the press release.

The survey was held in October, and its results are concerning. Before we move to the key takeaways from the press release, we should stress that, according to AIMA, debunking is a problem exclusive to crypto hedge funds. AIMA surveyed 20 other alternative investors who were not dealing with cryptocurrencies, and none of them had issues while receiving basic banking services.

The key takeaways from the AIMA press release

The key points from the AIMA press release are as follows:

1. AIMA surveyed 160 crypto hedge funds. Three-fourths of them have contested facing troubles while accessing or growing standard banking services in the last three years. 

2. The troubles may include complete service denial. Only 2% of the hedge funds whose relationships were about to be terminated received a formal explanation for that. The named reason was that the banks were limiting crypto clients. 

3. According to AIMA, debanking of crypto businesses (the so-called “Operation Choke Point 2.0”) undermines the operational efficiency of the U.S. crypto sector, negatively impacts investors’ confidence, and harms the acquisition of the skilled professionals.

John D’Agostino, a co-chair of the AIMA Digital Assets Group, concludes that the banking challenges are not a niche problem as they burden the overall development of the U.S. economy and innovation.

The complete report is available here.

AIMA calls for change, Trump vows to terminate Operation Choke Point 2.0

AIMA calls for a collaborative effort to address the challenges faced by the cryptocurrency business. The association sees the solution in working closely with the new administration, the leaders of the banking sphere, and policymakers. 

During the 2024 Presidential campaign, Trump, who was demonstrating his animosity towards the original Operation Choke Point started during Obama’s White House tenure, declared that he was going to shut down Operation Choke Point 2.0 as soon as he gets elected.

However, as the statements made by Jerome Powell during the FOMC event indicate, Trump will have to deal with various cryptocurrency sceptics, including ones with massive influences and high positions.

Wait a minute! Isn’t Operation Choke Point 2.0 just a conspiracy theory?

Let’s begin with a bit of history. Unleashed during the Obama presidency, Operation Choke Point was the Department of Justice’s secretive program allegedly aimed at denying banking services to fraudsters of all kinds, including those who traded ammunition, pornography, drug paraphernalia, etc. The idea was pretty simple: if we uncompromisingly cut the access to financial operations for fraudsters, they won’t be able to break the law, and many crimes will be prevented.

Soon, the operation achieved notoriety as, due to a lack of clear limitations, debanking turned into a weapon against political enemies instead of protecting society from fraud and crime. In 2013, the program critics came to believe that fighting the political opponents was the prime goal of Operation Choke Point. During the 2016 Presidential campaign, Donald Trump promised to eliminate this operation.

While the Obama-era Operation Choke Point was deployed officially, the existence of the modern-day Operation Choke Point 2.0 is yet to be confirmed. Nevertheless, the leaked documents and cases like the ones described in the AIMA press release make people think that an operation similar to Operation Choke Point exists nowadays and targets cryptocurrency companies. The operation is in effect, disregarding its official name. Although the FDIC seems to be the main actor in the operation, there are other disjointed institutions pushing banks to limit services for clients working in the crypto sector.

Some experts covering this “operation” expressed an opinion that the FDIC attack on the crypto industry is the response to the turbulent events that shook the crypto market in 2022. It includes the FTX collapse, TerraUSD losing its peg and crashing altogether, Celsius and Voyager freezing the users’ accounts, etc. 

However, let’s look closely at the documents released by Coinbase in December 2024. We will find out that the FDIC was pressing banks to stop working with cryptocurrency companies before these events. Although the cases mentioned above are not the result of the FDIC actions, they took place in circumstances where banks were already forced to pause service for the crypto clients. 

Possible implications of Operation Choke Point 2.0

Banks don’t have a clear checklist to determine if the client can access services. In a situation where banks cannot decide on the risk rate they are willing to work at, they may prefer to block services for the clients dealing with cryptocurrency to avoid a backlash from the FDIC.

AIMA has already voiced the possible implications. By far, pressure on banks and a lack of clear instructions will hurdle innovation in the U.S. and make the country unattractive for companies from the cryptocurrency sector.

No law compels Coinbase to “compromise the integrity of its platform” by doing business with Justin Sun-tied BiT Global, the U.S. crypto exchange wrote.

Coinbase asked a U.S. court to deny BiT Global’s lawsuit in Northern California, which seeks $1 billion in relief and a temporary restraining order on wrapped Bitcoin’s (wBTC)’s delisting.

The Justin Sun-affiliated BiT Global sued Coinbase on Dec. 13 for planning to remove the wrapped Bitcoin (BTC) asset from its U.S.-based exchange. BiT Global claimed delisting wBTC was illegal, would cause irreparable harm to the token’s economics, and was unjustified as Coinbase listed unserious cryptocurrencies like meme coins.

Also, launching cbBTC breached antitrust laws and threatened to create a Coinbase-controlled monopoly in the tokenized Bitcoin marketplace.

The crypto exchange argued that California’s Unfair Competition Law was inapplicable. DefiLlama confirmed that cbBTC ranked outside the top 10 tokenized BTC assets by market capitalization.

Coinbase has the right to choose whom to do business with, and no law requires it to allow bad actors or suspected bad actors onto its exchange… Coinbase does not have anything approaching monopoly power, and because its decision to delist wBTC was proper and justified based on the careful review it undertook and the unacceptable risk of doing business with an entity associated with Mr. Sun.

Coinbase response to BiT Global lawsuit

According to the December 17 court filing, material changes to wBTC’s stewardship, particularly Justin Sun’s majority control of the Bitcoin reserves, prompted Coinbase and other entities to reconsider their support for the asset.

The Securities and Exchange Commission charged Sun and three of his wholly owned companies with federal violations. Additionally, the FBI reportedly opened an inquiry regarding potential terror financing involving Sun.

The U.S. Department of Justice has not indicted Sun by publishing time, neither have authorities issued any arrest warrants for the Tron (TRX) founder.

Coinbase stated that its new wBTC risk assessments, in line with company listing standards, raised red flags, primarily due to Sun’s involvement. The exchange described its decision as “common sense” and necessary to protect its customers. The company also emphasized that delisting wBTC would not impact the token’s overall on-chain activity, which largely takes place on other platforms.

Nor can BiT claim harm, let alone irreparable harm, from being delisted from an exchange where less than 1% of transactions involving wBTC are made. Perhaps that is why BiT sat on its claims for nearly a month before filing suit, belying any urgency for relief.

The U.S. crypto titan asked the California Court to rule against BiT Global’s TRO request and $1 billion relief package, due to the firm’s ties to an allegedly indictable individual and fabricated emergency regarding wBTC.