- AI jitters, Fed uncertainty, and tepid risk appetite rattle markets.
- ETF selling approaches February levels.
BlackRock investors are offloading their Bitcoin holdings.
On Tuesday, the asset management behemoth saw clients pull $523 million out of its flagship iShares Bitcoin Trust.
It’s not alone: US spot Bitcoin exchange-traded funds have shed $3 billion so far in November, and are closing in on the $3.5 billion purge levels seen in February, DefiLlama data shows.
The broad selloffs come as Bitcoin’s price is still wobbling around the $90,000 mark on the back of a $1.2 trillion selloff of all cryptocurrencies over the past month.
“This kind of drift usually means the downtrend is likely to continue,” Georgii Verbitskii, founder of crypto investing app TYMIO, told DL News. “There is a real possibility that we’re entering a prolonged bearish period, with either continued downside or extended choppy trading around $100,000 or lower.”
It’s not just crypto-specific factors driving the downward price action, Nicholas Roberts-Huntley, CEO and co-founder of Blueprint Finance told DL News.
“Tightening liquidity, higher interest rates, and slower economic growth are all creating economic headwinds and market worry,” Roberts-Huntley said.
The selloff reflects a broader deterioration in global risk sentiment as equity markets wobble.
Investors are bracing for Nvidia’s earnings report on Wednesday, delayed US jobs data and a divided US Federal Reserve that remains unsure whether interest rate cuts should proceed this year.
AI uncertainty rattles stocks
In the US, the S&P 500 and Nasdaq logged further losses as investor positioning flips defensive ahead of Nvidia’s third-quarter report and the delayed September jobs data.
Nvidia is once again at the centre of a market storm. The $4.4 trillion chipmaker will report earnings on Wednesday, and although analysts expect blockbuster numbers, trader sentiment has turned fragile after weeks of questions over artificial intelligence companies’ valuations.
The market is now divided on whether AI stocks are entering a valuation reset. Hedge funds have traded exposure to Nvidia in near-perfect balance. According to Bloomberg, 161 funds increased their positions while 160 reduced them in Q3.
Peter Thiel’s Thiel Macro fund fully dumped Nvidia during the same period, selling 537,742 shares. At the same time, SoftBank confirmed it had liquidated its Nvidia stake for $5.83 billion, reallocating capital to other AI ventures.
Michael Burry, the legendary investor who shorted the 2008 crash, disclosed that his Scion Asset Management bought put options on Nvidia and Palantir, positions that would benefit from declines in the stock prices.
On Tuesday, Sundar Pichai, the head of Google’s parent firm Alphabet, told the BBC that AI investments have elements of “irrationality.”
Macro jitters
Meanwhile, Federal Reserve Vice Chair Philip Jefferson added to market unease earlier this week, saying he sees “increased downside risks to employment” and stressed policymakers must “proceed slowly” as rates approach neutral.
That uncertainty has hamstrung rate-cut expectations. The CME FedWatch tool now assigns roughly 49% odds to a December cut, while Polymarket bettors put the probability at 54%.
Crypto market movers
- Bitcoin is up 0.5 % over the past 24 hours, trading at $91,300.
- Ethereum is up 1.3% over the past 24 hours, trading at $3,050.
What we’re reading
- New lending protocols inch along in potential boon for ‘underbanked’ — DL News
- Why Vitalik Buterin wants Ethereum to stop changing. ‘It’s healthy’ — DL News
- Bitcoin Drops Below $95,000. Is a Fall Past $80,000 Next? — Unchained
- Markets dumped. Here’s why — Milk Road
- South Korean investigators vow crackdown after $6.8bn in crypto used in foreign currency smuggling — DL News
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at lance@dlnews.com.
