Bitcoin falls about 6% as US chip stocks slide after Democratic wins
Bitcoin and ether dropped with the Nasdaq as outlets linked the sell-off to AI regulation worries after the midterms and a weak Qualcomm report.
Bitcoin and ether fell sharply on Thursday as US stocks sold off at the open, erasing the gains the market made after Tuesday's midterm elections. Cointelegraph reported that bitcoin dropped 6% to a seven-week low when Wall Street opened. Decrypt put the decline at nearly 5% and said forced liquidations wiped out a Wednesday rally that had been helped in part by short covering.
According to Binance market data cited by Wu Blockchain, BTC fell 5.97% to $75,695.68 after touching a low of $75,568. ETH dropped 7.29% to $2,247.74, with a low of $2,236.78. The outlets' percentage figures differ slightly, likely because they measured at different times.
Liquidations and the stock sell-off
CoinGlass data cited by Wu Blockchain showed $879.92 million in crypto positions liquidated over four hours, made up of $818.90 million in longs and $61.02 million in shorts. Over 24 hours, liquidations reached $1.03 billion across 198,192 traders. The largest single liquidation was a $10.94 million ETHUSDT position on Binance. Decrypt's headline counted $428 million in long liquidations, a smaller number that probably reflects a different time window.
In stocks, Wu Blockchain reported intraday declines of 5.10% for the Nasdaq Composite, 3.43% for the S&P 500 and 2.41% for the Dow. BeInCrypto said US equities lost roughly $2 trillion in market value within an hour of the open. It said the S&P 500's losses topped 3%, its worst intraday drop since April 2025, and the Dow fell about 1,000 points. The Nasdaq entered correction territory, meaning it was at least 10% below its recent peak. BeInCrypto also cited a social media post showing a chip index down 11.2%, the worst since March 2020.
What the outlets blame
Wu Blockchain and BeInCrypto both tied the move to worries about AI regulation. Democrats won both chambers of Congress on Tuesday, according to BeInCrypto. They also flipped governorships in Texas, Georgia and Ohio. All three governors-elect campaigned against rapid data center growth. Their proposals include a construction moratorium in Texas, a temporary pause in Georgia and a requirement in Ohio that developers cover their own utility costs.
Data centers are the main buyers of AI chips from Nvidia, AMD and Broadcom, BeInCrypto noted. It cited a Bloom Energy report, via Fortune, projecting that Texas will hold nearly 30% of US data center capacity by 2028. BeInCrypto also pointed to Qualcomm, whose handset chip revenue fell 26% to $5.14 billion and missed analyst estimates. Its shares fell almost 12% and pulled other chipmakers lower. Counterpoint Research said global smartphone shipments fell 20% in the September quarter to a 14-year low.
Wu Blockchain added that Democrats plan to investigate Trump family business dealings, including crypto-related ventures. That report has not been confirmed by the other sources here.
What remains unresolved
The sources give no dates for any follow-up. The governors-elect's data center proposals are campaign pledges, and none of the sources say whether they will become policy. The planned Democratic investigation into Trump family business dealings is likewise described only as a plan. Qualcomm's results and the effect of rising memory chip costs on phone prices remain a pressure point for chipmakers.
Sources
- Canadian Man Extradited to US Over Plot to Hijack University Supercomputers for Crypto Decrypt
- US Stocks and Crypto Plunge as Democratic Sweep Fuels AI Regulation Fears Wu Blockchain
- Why Is the US Stock Market Crashing? 3 Reasons Behind the $2 Trillion Wipeout BeInCrypto
- Bitcoin Erases Election Rally as AI Stocks Plunge, $428 Million in Crypto Longs Get Wiped Out Decrypt
- Bitcoin crashes 6% to 7-week low as US stocks erase election gains Cointelegraph
Written with AI assistance from the sources above and checked against them. Not investment advice.