A renewed downturn in digital assets has left analysts perplexed, with Arca Co-Founder and Chief Investment Officer Jeff Dorman saying current market behavior “makes little sense” given improving macro indicators and revived expectations for Federal Reserve rate cuts.
Dorman’s views appear in his December analysis, “The Selling Nobody Can Explain,” where he details why recent price weakness conflicts with historical patterns and market data. According to him, digital assets have fallen in seven of the past eight weeks even as U.S. inflation readings eased and traders pushed the probability of a December rate cut back toward 90%.
He cites the surprising divergence between equities — which closed November in positive territory — and crypto markets that “fail to rally with good news.” His latest note stresses that sentiment-driven tokens are dropping sharply, yet assets with stronger financial or utility value have not shown the relative resilience normally seen in such environments.
Dorman argues that a growing overlap between traditional finance (TradFi) and crypto may be contributing to the unexplained selling. He highlights commentary from investor Bill Ackman, who suggested price correlations between crypto and unrelated assets like Fannie Mae and Freddie Mac. Dorman writes that institutional portfolio shifts outside the crypto sector may now be influencing flows in ways industry participants cannot easily observe.
Read more: Peter Schiff Says Rising Bond Yields Explain Why Bitcoin and Other Crypto Are Getting Killed
Other factors cited include reported concerns surrounding stablecoin issuer Tether. Dorman points to S&P’s recent downgrade and its September 2025 attestation showing 70% backing in cash and equivalents, with the remainder in gold, bitcoin and corporate loans. He maintains that liquidity fears are misplaced, stating that more than 70% of redemptions occurring overnight is “impossible,” while solvency concerns remain highly theoretical given the company’s profitability.
Perianne Boring, founder and CEO of The Digital Chamber, echoed the industry’s unease as many cannot put a finger on why things are so bearish. “When even Jeff Dorman — one of the industry’s most experienced investors — says he can’t explain what’s happening, you know something is off,” she wrote on X, adding: “This doesn’t look organic. It looks coordinated.”
The Arca co-founder replied to Boring’s X post, noting that every one of the “supposed reasons” circulating around the downturn falls apart under scrutiny. He stated:
“MSTR isn’t selling, Tether isn’t insolvent, DATs aren’t selling, NVDA isn’t blowing up, the Fed isn’t turning hawkish, the tariff wars aren’t restarting, etc. I still have no idea why crypto is down.”
Boring even asked Dorman about the yen carry trade impact and he wasn’t buying it. “It doesn’t really hold up,” the Arca exec replied. “Japanese bond yields have been rising for 3+ years. There was nothing magical about the most recent move higher on Sunday.”
Despite attempting to rationalize some downward moves, Dorman concludes in his article published this week that the continuing weakness “has us scratching our heads,” emphasizing that the analysis represents his interpretation of current market dynamics.
- What triggered Jeff Dorman’s concerns?
Dorman said digital assets keep selling off despite improving macro signals and stronger rate-cut expectations. - Why did Perianne Boring comment on the report?
She argued the unexplained selling “doesn’t look organic” and suggested it appears coordinated. - Did Dorman cite specific risks affecting the downturn?
He pointed to cross-market flows, sentiment weakness, and renewed scrutiny of Tether’s asset backing. - What was his overall conclusion?
Dorman said the persistent decline remains difficult to justify based on available data and industry feedback.
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