December Downturn: Bitcoin Below 87K as DeFi Exploits and Japan Yield Shock Trigger 636M in Liquidations

December 1st, 2025 brings significant turbulence to crypto markets. Bitcoin fell over five percent to eighty-seven thousand dollars, Ethereum dropped five percent, and XRP declined seven percent as multiple catalysts combined to trigger six hundred thirty-six million dollars in liquidations. The sell-off was sparked by a nine million dollar exploit at Yearn Finance's yETH liquidity pool, compounded by Japanese government bond yields hitting seventeen-year highs and raising Bank of Japan rate hike expectations. Meanwhile, Tether faces fresh scrutiny after S&P downgraded USDT to its weakest rating, citing reserve transparency concerns and bitcoin concentration risk. On the regulatory front, China announced an intensified crackdown on virtual currencies and stablecoins, while Japan moved in the opposite direction by cutting crypto tax rates to a flat twenty percent. Institutional positioning shows caution with ETF outflows continuing and derivatives leverage being flushed out. We also cover Ethereum's upcoming Fusaka upgrade scheduled for December 3rd, Sony Bank's plans to launch a USD stablecoin in the US, and Kazakhstan's central bank announcing up to three hundred million dollars in crypto investments.