Bitcoin erases post-midterm bounce, leading crypto stocks down

Bitcoin BTCUSD lost ~5% over the past 24 hours, trading at $76.3K as of Thursday 11:15 AM ET, erasing the 4% bump up it saw on Wednesday. The setback came as investors appear to be spurning risk as they digest the implications of the midterm elections.

So far, the aspiration that Bitcoin would provide a safe haven when more traditional risk assets falter hasn't materialized.

Along with crypto, the tech-heavy Nasdaq, which has been fueled by the AI boom, fell 4.2% in late morning trading. With the Democrats set to control the House and Senate in January, legislating can become more challenging. Progress on the CLARITY Act may slow down even more.

Furthermore, the AI buildout, especially through the construction of data centers, could come under stricter scrutiny. The iShares Future AI & Tech ETF ARTY sank 10%. Note that crypto only exists in a data construct, so the sector depends on servers.

That aversion to risk is also evident in higher bond prices. The yield on the 10-year Treasury fell 3.5 basis points to 4.859%. Another safe haven, gold XAUUSD, climbed 0.5% to $4,080.85.

Other digital assets tanking include Ethereum ETH -6% to $2.28K, XRP XRP -4.8% to $1.25, Solana SOL -6.0% to $90.58, and Hyperliquid (HYPE-USD) -7.5% to $78.94.

With the slump in crypto, the usual group of digital asset-linked stocks are also sliding. Coinbase Global COIN tanked 11%, Riot Platforms RIOT -13%, Hut 8 HUT -11%, MARA Holdings MARA -15%, Hive Digital HIVE -11%, Circle Internet CRCL -13%, Strategy MSTR -9.8%, and Robinhood HOOD -11%.