Bitcoin crashes below $76,000 as AI bubble fears wipe $2.5 trillion from Wall Street

Technology stocks plunged after the Democratic midterm sweep intensified concerns over AI spending, dragging Bitcoin lower as leveraged traders suffered heavy losses.

Bitcoin hit an intraday low of $75,568 on Thursday and recovered to $76,830.67 as of press time, as a historic selloff in US technology stocks spilled into crypto markets and triggered more than $1 billion in liquidations across leveraged trading positions.

According to CoinGlass data, approximately $1 billion in leveraged positions had been liquidated over the previous 24 hours, affecting more than 201,000 traders.

Bullish positions accounted for $926.8 million, or nearly 89% of the total, compared with $118.2 million in bearish bets.

Bitcoin accounted for $264.2 million in liquidations, followed by Ethereum at $165.3 million and Solana at $33.5 million. The largest single liquidation was a $10.94 million ETH long position on Binance.

The losses coincided with a sharp reversal on Wall Street, where the Nasdaq Composite plunged 4.9% and entered correction territory, falling more than 10% below its October record. The S&P 500 declined 3.2%, while the Dow Jones Industrial Average shed more than 1,100 points.

The Kobeissi Letter estimated that approximately $2.5 trillion had been wiped from US stock market valuations and reported that the Cboe Volatility Index, Wall Street's closely watched fear gauge, had surged more than 70%.

The market commentary firm attributed the speed of the collapse to excessive leverage meeting an abrupt change in investor sentiment, rather than a sudden deterioration in corporate fundamentals.

Democratic victory threatens the AI spending boom

The selloff followed the Nov. 4 rally, when investors initially welcomed the Democrats' sweeping midterm victories as a potential constraint on President Donald Trump's economic policies.

However, attention quickly shifted toward the implications for the artificial intelligence industry, whose enormous capital expenditure commitments have helped sustain US equity valuations.

Investors are increasingly concerned that tighter political oversight, rising construction costs, and local opposition to data centers could undermine the expected growth in AI infrastructure spending.

The Kobeissi Letter stated:

"Such a ban, if even possible to enforce, would effectively mean the US surrendering its position in the global AI race to China."

Those concerns have gained traction following Tuesday's elections. According to Ballotpedia, 46 of the 47 local data-center-related measures decided across the US in 2026 favored tighter restrictions, although some votes were advisory rather than legally binding.

The political backlash threatens to complicate an investment cycle built on expectations of continued demand for AI chips, electricity, computing infrastructure and data-center construction.

Nvidia fell below $200 for the first time since August, while the Nasdaq 100 declined approximately 5.5%, putting it on course for its steepest daily loss since April 2025.

Economist Mohamed El-Erian questioned whether the rest of the US economy could maintain its momentum if technology investment slowed.

He also cautioned against assuming that Democratic control of Congress would necessarily translate into a substantial slowdown in the technology sector.

Meanwhile, Citrini Research argued that expectations for AI infrastructure spending may have peaked as investors reassess whether projected returns can justify the industry's enormous capital requirements.

The research firm clarified that it was identifying a potential peak in spending estimates.

The distinction is significant for Bitcoin, which has increasingly traded alongside technology stocks during periods of financial market stress.

Thursday's simultaneous collapse in technology shares and cryptocurrency prices suggests investors are reducing exposure to speculative assets as uncertainty over AI investment returns, financing costs, and future regulation intensifies.

The next test comes as markets assess whether the political backlash will materially slow data-center construction or merely reduce expectations for how quickly the AI industry can expand.