The crypto crash is just a “growing pain,” and with more liquidity set to add to the record $137 trillion worldwide, the market is nearing a bottom, according to The Kobeissi Letter.
In a November 16 wire on Xthe macro research firm told its 1.1 million followers that the recent market sell-off is a “structural” shift in market dynamics and not a collapse in crypto’s underlying value.
“The fundamental value of crypto has only improved, but market dynamics are shifting,” the report said. “Every 25%-plus downturn in crypto history has had the exact same result: investors are only calling for the end of crypto so that new all-time highs can follow.”
It noted that more liquidity is on the way to add to the record $137 trillion in global M2 money supply, with Japan preparing a stimulus package of more than $110 billion and US President Donald Trump promising to give $2,000 stimulus checks to millions of Americans who are not yet rich.
“As with any efficient market, the ripples will work out,” the report said. “We think the bottom is near.”
Crypto markets role
The company’s comments come at a time when crypto markets are reeling from a sharp correction. Market leaders Bitcoin and Ethereum are down more than 10% in the past week, and ETH is down 17.5% in a month.
XRP is also down 10% in the past week, while Solana is down 16% in the past week and 23.4% in a month.
To support its argument that crypto is near a bottom, it posted a photo of the Bitcoin vs. gold chart.
“For more than twelve months, Gold and Bitcoin moved with high correlation; the safe haven assets,” according to The Kobeissi Letter. But Gold has outperformed Bitcoin by 25 percentage points since early October, it added, suggesting better times are ahead for BTC if correlation resumes.
If you really zoom out, it looks like crypto is in a ‘structural’ bear market.
The fundamental value of crypto has only improved, but the market dynamics are changing.
As with any efficient market, the ripples will work themselves out.
We think the bottom is near. pic.twitter.com/ra2QaFwoHy
— The Kobeissi Letter (@KobeissiLetter) November 16, 2025
Leverage played a major role in the crypto market crash
The Kobeissi letter states that excessive leverage is behind the crypto market crash, with traders often using 20x, 50x, or even 100x leverage, adding that even a 2% move at 100x leverage can be enough to wipe out a trade.
“When millions of traders use leverage, it leads to a domino effect,” the report said, adding that the market was vulnerable to sharp liquidations once prices fell.
These positions are now being forced out, which the company says is a painful but necessary reset ahead of the next accumulation.
The correction began on October 10, the report said, when a record $19 billion in leveraged positions were liquidated after Trump announced 100% additional tariffs on Chinese exports.
It noted that crypto funds saw outflows of about $1.2 billion in the first week of November and that leverage led to three days of more than $1 billion in liquidations in the past 16 days, while “daily liquidations of more than $500 million have become a normal occurrence.”
It also appears to be a structural and mechanical decline.
It all started with an institutional outflow in mid to late October.
In the first week of November, crypto funds saw an outflow of -$1.2 billion.
The problem becomes excessive levels of debt amid these outflows. pic.twitter.com/m5ZHgygNPx
— The Kobeissi Letter (@KobeissiLetter) November 16, 2025
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