Bitcoin, crypto stocks caught in AI trade meltdown, but Wintermute trader sees 'glass half full'

Bitcoin fell below $76,000 on Thursday as a rout in artificial intelligence-linked stocks swept through markets, dragging crypto down with it.

The Nasdaq sank nearly 6%, on track for its worst day since Trump’s tariff rollout in April 2025, while a chip-sector index plunged over 10% in early trading. Crypto miners, many of which have been shifting their businesses toward AI computing, tumbled 15%-20%.

The selloff came as investors began weighing the fallout from Tuesday's U.S. midterm elections, which handed Democrats control of both chambers of Congress. The concern is that greater political opposition could slow the construction of data centers powering the AI boom, a trade that has become increasingly important for bitcoin miners.

“We're seeing some fresh selling come back to the market as the implications on slower datacenter build out enter into focus,” said Joshua Lim, global co-head of markets at institutional crypto brokerage FalconX.

“Yesterday's post-election relief rally was driven by a lot of short-covering into a well-telegraphed result,” he added.

Carlos Guzman, vice president of research at digital asset trading firm GSR, said investors were already questioning the returns on the vast sums being poured into AI infrastructure. The election results added another headache, he said.

“The midterms appear to have triggered this sell-off, with investors worried that greater opposition to data-centre expansion could slow the AI buildout,” Guzman said. “This has added to concerns about the returns on AI spending that were already building.”

Disappointing earnings from chipmakers have added to the pressure, he noted.

Crypto stocks were caught in the selling. Coinbase COIN$135.55, the largest U.S. crypto exchange, stablecoin issuer Circle CRCL$67.13 and digital asset custody firm BitGo BTGO$4.6030 plunged between 10% and 15%. Bitcoin treasury company Strategy MSTR$127.87 lost 9.6%.

Crypto losses relatively muted amid leverage flush

The major cryptocurrencies, however, held up somewhat better than many stocks tied to the AI trade.

Bitcoin was down roughly 5.5% over the past 24 hours, back near the levels seen before Wednesday's rally. Ether , Solana (SOL), XRP (XRP) and Hyperliquid (HYPE) suffered slightly steeper, 6%-7% losses.

The reversal came with a wave of forced selling in derivatives markets, where traders had piled into leveraged bets on higher prices.

More than $1 billion in crypto derivatives positions were liquidated over the past 24 hours, according to CoinGlass, with most coming from bullish bets. It was the largest wipeout since at least Oct. 28-29, when bitcoin tumbled from nearly $82,000 to $76,000.

Crypto liquidations over the past 24 hours.(CoinGlass)

“We had a relief rally yesterday that seemed to be happening on optimism about the geopolitical situation due to the midterm results,” Guzman said. “The situation appears to have flipped today with a pullback in risk appetite amplified by leverage.”

Wintermute's Jasper De Maere cautioned against reading too much into a single day's selloff.

Crypto has held up relatively well amid the turmoil in AI stocks, he said, while broader adoption continues to strengthen the longer-term outlook.

“Let’s see where we land in the short term here, medium term still glass half full,” De Maere said. With correlations across assets running high, he added, investors should “keep an eye out for bargains surfacing over time.”