$76,000 Level Gives Way for Bitcoin as NASDAQ Slides 5% in AI Sell-Off

• 5% is wiped off Bitcoin as it drops below $76,000. Concerns over crypto and AI regulation erase its post-midterm gains.
• More than 6% is lost by Ethereum, Solana and XRP as crypto liquidations exceed $1 billion.
• 5% and 3.5% declines hit NASDAQ and S&P 500, respectively, as AI-related shares tumble.

The NASDAQ Composite (IXIC) lost as much as 5%. AI-related shares drove the decline amid concerns that Democrats' control of both chambers of the US Congress could bring tighter crypto and AI regulation. Bitcoin (BTC) and the broader crypto market also retreated as US markets opened on Thursday.

$76,000 breached as Bitcoin falls with tech shares

A decline of more than 5% over the past 24 hours took Bitcoin below $76,000, wiping out Wednesday's post-midterm election rally. The wider crypto market's capitalisation contracted 4.5% to $2.71 trillion. Ethereum (ETH), XRP and Solana (SOL) each shed more than 6%.

Nearly $900 million in crypto futures positions have been liquidated over the past four hours following the sell-off. Liquidations over the past 24 hours consequently reached $1.08 billion, with nearly $953 million coming from long positions.

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

Behind the sell-off are concerns that Democrats' control of the House and Senate after Tuesday's midterm elections could bring tighter regulation of crypto and AI.

According to earlier reporting, Democrats are developing 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 stricter ethics measures governing political officeholders' involvement with crypto.

Traders linked the equity sell-off to Democrats' resistance to rapid AI-sector expansion.

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 increasing correlation between cryptocurrencies and tech shares, particularly AI-related equities.