On Thursday, Bitcoin dropped below $76,000 amidst a technology-driven selloff across Wall Street, prompting investors to shy away from riskier assets and wiping out much of the cryptocurrency’s gains following the midterm elections.
The leading digital currency declined by 5.65%, settling at $75,880.60, as reported by The Motley Fool, marking a weekly loss exceeding 5%. Ethereum saw a decrease of 7.80%, reaching $2,233.79, while Solana experienced a downturn of 6.22% to $89.55. According to CoinMarketCap, the total market capitalization of the global cryptocurrency sector stood at $2.56 trillion, down 4.22% in just 24 hours—a loss exceeding $108 billion.
| Asset | 24-hour change | Price |
|---|---|---|
| Bitcoin | -5.65% | $75,880.60 |
| Ethereum | -7.80% | $2,233.79 |
| Solana | -6.22% | $89.55 |
| Total crypto market cap | -4.22% | $2.56 trillion |
Note: Prices and 24-hour metrics for BTC, ETH, and SOL sourced from FMP; overall market cap data from CoinMarketCap.
This downturn followed a challenging day for U.S. equities, with the Nasdaq Composite plummeting by 5.5%, marking its most significant single-day decline in 18 months. Investors expressed doubts regarding high valuations and the sustainability of substantial investments in artificial intelligence infrastructure. Additionally, the S&P 500 dropped over 3%, while the Dow Jones Industrial Average saw a decline close to 3%.
The crypto market’s decline was exacerbated by leveraged positions. As asset prices fell, forced liquidations created additional selling pressure, exacerbating losses throughout the sector. Notably, this sharp reversal occurred just a day after digital assets had observed a brief rally post-election.
Spot Bitcoin exchange-traded funds have also faced challenges. They reported over $1.1 billion in net outflows across three consecutive days before seeing a slight inflow on Wednesday. The broader market decline raises concerns that institutional withdrawals might continue. The iShares Bitcoin Trust ETF (IBIT) fell by 5.07%, the Fidelity Wise Origin Bitcoin Fund (FBTC) decreased by 4.93%, and the iShares Ethereum Trust ETF (ETHA) saw a 7.25% decline.
Political developments contributed to the cautious sentiment. Following Democratic gains in the midterms, investors are now considering the possibility of increased regulation of artificial intelligence and data-center companies, putting pressure on tech stocks. Additionally, uncertainty regarding how the new congressional balance will approach digital assets has led to a reduced risk appetite.
Expectations that the CLARITY Act—a proposal aimed at establishing a comprehensive legal framework for the digital asset sector—would gain traction in Congress have diminished post-election. The likelihood of this legislation advancing before year’s end is now considered low, leaving crypto businesses and investors without a clear understanding of the regulatory landscape.
Attention has now shifted to Bitcoin’s ability to maintain its range between $75,000 and $76,000. A decline beneath this threshold could signal a more profound correction, with the overall altcoin market facing similar pressures after substantial pullbacks in Ethereum, XRP, and Solana.
The future trajectory for digital assets is likely to depend on traditional markets. If the selloff in technology and AI-related stocks continues, cryptocurrencies may find it hard to undertake a meaningful recovery. A crucial indicator will be whether Bitcoin and the broader crypto landscape can sustain their support levels even as the Nasdaq and semiconductor shares weaken. Until a separation emerges, or the tech market recovers, temporary rebounds may not provide strong evidence of a lasting turnaround.