Bitcoin falls below $76,000 as NASDAQ drops 5% on AI sell-off
- Bitcoin slides 5% below $76,000, erasing post-midterm gains following concerns surrounding crypto and AI regulations.
- Ethereum, Solana and XRP fall more than 6% as crypto liquidations cross $1 billion.
- AI-related stocks plunge with NASDAQ and S&P 500 down 5% and 3.5%, respectively.
Bitcoin (BTC) and the wider crypto market fell on Thursday as US markets opened. Losses in AI-related stocks pushed the NASDAQ Composite (IXIC) down as much as 5% amid concerns that Democrats' control of both chambers of the US Congress could lead to tighter crypto and AI regulations.
Bitcoin slides alongside tech stocks
Bitcoin dropped below $76,000, down more than 5% over the past 24 hours, erasing gains from Wednesday's post-midterm election rally. Ethereum (ETH), XRP and Solana (SOL) fell more than 6%, while the broader crypto market capitalization fell 4.5% to $2.71 trillion.
The drop has sparked nearly $900 million in crypto futures liquidations over the past four hours. That has sent liquidations over the past 24 hours to $1.08 billion, driven by nearly $953 million in liquidated long positions.
The crypto decline and liquidations coincided with the opening of US markets. The tech-heavy NASDAQ and S&P 500 initially fell sharply by 5% and 3.5%, although there has been a small recovery. Losses were pronounced in semiconductor and AI-related names, with the Semiconductor Index (SOX) falling 10%. Most of the decline flowed from Nvidia (NVDA), Advanced Micro Devices (AMD) and Qualcomm (QCOM).
The move follows concerns that Democratic control of both the House and Senate following Tuesday's midterm elections could tighten crypto and AI regulations.
Earlier reports highlighted that Democrats are working on a new crypto market structure bill that could expand the SEC's oversight of crypto while limiting the CFTC's influence. They also intend to introduce stricter ethics measures on political officeholders' involvement with crypto.
Traders attributed the stock market decline to Democrats' opposition to rapid expansion in the AI sector.
Rep. Yassamin Ansari said in a Wednesday X post that Democrats' agenda in the new Congress should focus on pausing advanced AI development and place a "ban on artificial superintelligence."
The crypto market's response also reflects growing correlation between tech stocks, particularly AI-related equities, and cryptocurrencies.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addition to
