- Bitcoin fell 6% to US$75,532, while Ethereum dropped 8.2% and the overall crypto market lost 5.64%, pushing sentiment into fear territory.
- Crypto liquidations reached US$1.25 billion, including US$294.95 million in Bitcoin long positions, as selling pressure intensified.
- AI spending concerns drove sharp equity losses, with the Nasdaq falling 5.5%, the semiconductor index plunging 12.2% and South Korea’s KOSPI dropping more than 8% intraday.
- US spot Bitcoin ETFs recorded US$430.2 million in net outflows, while BlackRock’s IBIT extended its five-day withdrawal streak to US$1.04 billion.
The crypto market is in the red, with most major assets crashing hard. At the time of writing, Bitcoin (BTC) was down 6% on the daily chart and traded for US$75,532 (AU$109,436). Ethereum (ETH) was hit even harder, with an 8.2% drop to US$2,223 (AU$3,220).
XRP fell 8.1% to US$1.20 (AU$1.73), while Solana (SOL) fell 7% to US$89.17 (AU$129.18).
Overall, the crypto market cap dropped by 5.64% to US$2.54 trillion (AU$3.68 trillion) as the Fear and Greed Index slipped to 28, flipping yesterday’s neutral stance into fear.
Amid the chaos, CoinGlass reports US$1.25 billion (AU$1.81 billion) in liquidations, with US$294.95 million (AU$427.38 million) in Bitcoin long liquidations alone.
The main reason for the crash appears to be a sharp sell-off in AI-related stocks following the US midterms. Investors are questioning whether the huge sums being spent on AI will deliver the expected returns, while concerns about tighter regulation and possible limits on new data centres are adding to the uncertainty.
Read more: Coinbase Says 99% of Customer Crypto Is Offline Following Binance Hack
The Wider Market Crash
With that, the Nasdaq dropped 5.5%, the S&P 500 4.4% and the Dow Jones 3.4%. The Philadelphia Semiconductor Index, a direct measure of the performance of companies involved in the semiconductor sector, dropped 12.2%.
The sell-off spread to Asia, where South Korea was among the hardest hit. The KOSPI crashed by more than 8% at one point, which triggered a 20-minute trading stop. Again, companies involved in the semiconductor sector, such as Samsung Electronics and SK Hynix, were among the hardest hit.
Japan’s Nikkei was also not spared significant losses, while the ASX 200 declined more modestly.
Tim Holland, chief investment officer at Orion, told CNBC that investors are “stepping away until they get a better sense of the implications of the midterms around the AI capex cycle in particular”. He called it “the biggest economic tailwind we’ve had going for us for the last […] three years”.
Meanwhile, the US spot Bitcoin ETF sell-off deepened, with US$430.2 million (AU$624.31 million) in net outflows across the funds. As reported, yesterday saw some moderate inflows, while the largest fund, IBIT, has now hit a five-day net outflow streak, with a total of US$1.04 billion (AU$1.5 billion) exiting the fund over that period.
Read more: Ripple CEO Says XRP Remains Top Priority Despite RLUSD Stablecoin Expansion
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