Bitcoin fell sharply on Thursday, extending losses as a broad sell-off in U.S. equities, led by artificial intelligence (AI) and data-center stocks, weakened investor appetite for riskier assets.
The world’s largest cryptocurrency dropped 5.60 percent to $75,870 as of 5:51 GMT, while Ether, the second-largest cryptocurrency by market capitalization, declined 7.01 percent to $2,252.93.
Wall Street sell-off pressures cryptocurrencies
The downturn followed a brief recovery earlier in the week, when cryptocurrencies and other risk-sensitive assets rallied after Democrats secured major gains in the U.S. midterm elections. However, the initial optimism faded as investors reassessed the implications of the election results and mounting concerns over the outlook for the technology sector.
Wall Street stocks tumbled on Thursday as an intensifying sell-off in AI and data-center companies raised questions about the sustainability of the sector’s enormous investment plans.
The Nasdaq 100 plunged as much as 6 percent, putting it on course to wipe out more than $2 trillion in market value, while the S&P 500 fell as much as 3.50 percent.
The Nasdaq Composite also approached confirmation of a technical correction, defined as a decline of at least 10 percent from a recent peak.
The Dow Jones Industrial Average dropped 2.84 percent, while the Russell 2000 Index declined 3.88 percent, reflecting the broad-based deterioration in market sentiment.
The weakness in equities added to pressure on cryptocurrencies, which have increasingly traded in line with broader risk assets.
Regulatory uncertainty weighs on Bitcoin
Despite the initial post-election rally, questions surrounding the regulatory outlook for digital assets under a Democrat-controlled Congress continued to limit Bitcoin’s recovery.
Democratic lawmakers have historically subjected the cryptocurrency industry to greater regulatory scrutiny, with many expressing concerns over money laundering, risk management and investor protection.
Democrats also played a role in blocking the Clarity Act earlier this year, raising uncertainty over the prospects for future cryptocurrency legislation, much of which has received Republican support.
The election outcome therefore introduced fresh questions about the direction of U.S. crypto policy, tempering the optimism generated by the broader market rally.
Other major cryptocurrencies also recorded losses on Thursday, tracking Bitcoin’s decline. XRP fell 5.45 percent, while Solana and Cardano dropped 6.87 percent and 7.54 percent, respectively. BNB declined 3.43 percent, while Dogecoin shed 6.97 percent.
