Bitcoin slips below $76,000 as AI sell-off drives NASDAQ down 5%

• A 5% fall takes Bitcoin below $76,000 and wipes out its post-midterm gains amid concerns over crypto and AI regulation.
• Crypto liquidations exceed $1 billion as Ethereum, Solana and XRP each lose more than 6%.
• Declines of 5% in the NASDAQ and 3.5% in the S&P 500 accompany a sell-off in AI-related shares.

A fall of as much as 5% in the NASDAQ Composite (IXIC), led by AI-related shares, accompanied losses in Bitcoin (BTC) and the broader crypto market as US trading opened on Thursday. The sell-off came amid concerns that Democratic control of both chambers of the US Congress could bring tighter regulation of crypto and AI.

Bitcoin falls as technology shares retreat

Wednesday's post-midterm election gains were erased as Bitcoin fell below $76,000, losing more than 5% over the past 24 hours. Declines of more than 6% hit Ethereum (ETH), XRP and Solana (SOL), while the wider crypto market's capitalisation contracted by 4.5% to $2.71 trillion.

Nearly $900 million in crypto futures positions have been liquidated over the past four hours following the fall. Total liquidations over the past 24 hours consequently reached $1.08 billion, with long positions accounting for nearly $953 million.

As US markets opened, cryptocurrencies fell and liquidations mounted. Initial losses of 5% in the technology-heavy NASDAQ and 3.5% in the S&P 500 have since been followed by a modest recovery. Semiconductor and AI-related shares bore particularly heavy losses: the Semiconductor Index (SOX) dropped 10%, with Nvidia (NVDA), Advanced Micro Devices (AMD) and Qualcomm (QCOM) accounting for most of the decline.

Behind the move are concerns that crypto and AI could face tighter regulation after Tuesday's midterm elections handed Democrats control of both the House and Senate.

Previous reporting indicated that Democrats are drafting a new crypto market structure bill that could broaden the SEC's oversight of crypto and curb the CFTC's influence. Their plans also include tougher ethics rules governing political officeholders' involvement with crypto.

Market participants linked the equity sell-off to Democrats' resistance to the AI sector's rapid expansion.

Setting out her view in a post on X on Wednesday, Rep. Yassamin Ansari said the Democratic agenda in the new Congress should prioritise a pause in advanced AI development and impose a "ban on artificial superintelligence."

Also reflected in the crypto market's reaction is the strengthening correlation between cryptocurrencies and technology shares, especially AI-related equities.