The Big Tech selloff on Thursday is spooking investors and dragging down Bitcoin and other cryptocurrencies, analysts say.
Bitcoin’s price has tanked by over 6% over the past 24 hours, according to CoinGecko.
Optimistic traders hoping for a bounce have been wiped out, with $1.6 billion in long positions liquidated, Coinglass data shows.
“Concerns around heavy AI investment by big tech, without the corresponding earnings to justify the spend, appear to be unsettling broader risk assets,” Matt Howells-Barby, VP of growth at crypto exchange Kraken, said in an investor note shared with DL News.
A retest of $80,000 per Bitcoin is a real possibility, he said.
The downturn comes as Microsoft’s value dropped by about $357 billion in the second-largest selloff for a single trading session in stock market history.
“Markets were firmly risk-on going into this move, so it’s not surprising to see investors pause and reassess their risk appetite,” Howells-Barby said.
The selloff also dented precious metals, which have enjoyed a meteoric rise in recent months. Gold sank nearly 3% in the past day, and is trading at $5,177 at the time of reporting.
Crypto-linked companies were also hammered. Strategy and Bitmine both saw their share price sink nearly 10%.
More uncertainty ahead
Further blinding investors’ radar, the US Senate’s last-minute push to avert a federal government shutdown hit turbulence late on Thursday night.
Republican Senator Lindsey Graham halted the government funding package, forcing lawmakers to delay a final vote. He is insisting on further funding for the Department of Homeland Security.
Bettors on Polymarket now anticipate a 61% chance of a US government shutdown by January 31.
The last government shutdown in October and November caused lasting damage to markets, with the White House describing the economic situation as “flying blind.”
The crypto industry still hasn’t recovered from its October peaks, and is now sitting below $3 trillion.
Crypto market movers
Bitcoin is down 6.3% over the past 24 hours, trading at $82,417.
Ethereum is down 7.4% past 24 hours at $2,728.
