Deflation in Mandarin. Bitcoin holders have been watching the AI bubble as the top risk to their portfolios for months. However, the first air leak does not come from Nasdaq. Indeed, mainland Chinese stocks have lost around $2.4 trillion in capitalization since May. This is the count published Tuesday October 27 by Decrypt. The last time China shook semiconductors, Bitcoin took a hit in the process.
However, this time, BTC is cashing out. It was floating around $80,900 at 7 a.m. this Wednesday according to CoinGecko and awaits the Fed this evening.
Key Points
Shanghai's STAR 50 has wiped out nearly $480 billion in less than four months. The CSI 300 entered the bear market on October 22
AI-related stocks account for 42% of Chinese capitalization and 57% of volumes according to Goldman Sachs
Robot maker Unitree has halved its share price since an 8,000 times oversubscribed IPO in August
Same night, Wall Street cheered $63 billion in Broadcom funding for Anthropic's chips
AI tokens have already lost 41% since March. Bitcoin slipped below $80,000 on Monday before recovering
Chinese stock market down 40% on the STAR 50 and 480 billion gone
Start with Shanghai. The STAR 50 brings together the fifty biggest technology stocks in the market. But he lost 40% in less than four months. Nearly $480 billion went up in smoke on this basket alone.
However, the index remains expensive. He still pays himself a hundred times the profits of his companies. At the peak of euphoria, it was almost 250 times. By comparison, the Nasdaq 100 is around 30.
The rest of the market then followed. The CSI 300 brings together large caps from Shanghai and Shenzhen. It entered the bear market on October 22, with more than 20% decline since its peak. According to Goldman Sachs, AI-related companies account for 42% of the market value of Chinese stocks, including the mainland and Hong Kong. They also represent 57% of exchanges.
Beijing manager Dong Baozhen summarizes the sequence in the Decrypt article: “The market ended up transforming into a crazy speculative bull run. And now we see the bubble burst. »
Unitree makes humanoid robots. When it was introduced in August, individuals requested 8,000 times the number of shares offered. Since then, the stock has lost almost half its value. Zhongji Innolight and Eoptolink cable data centers with their optical modules. Both specialists have fallen approximately 60% from their highs. In the meantime, Washington is preparing to exclude Chinese optical components from its own data centers.
While Shanghai deflates, Wall Street borrows to inflate
The contrast of the night is worth the detour. At the time Decrypt published its statement, Nasdaq welcomed a $63 billion financing package put together by Broadcom. It must be used to rent AI equipment from Anthropic. The market also applauded a capital increase of 25 billion Meta, oversubscribed five times. Nebius gained more than 11%, CoreWeave almost 8% and AMD more than 5%. The figures come from KuCoin's daily report from October 28.
Same bet, different financing. In China, individuals paid for Unitree with their savings. On the other hand, the American giants pay for their data centers with debt.
The Bank for International Settlements released its calculator the same day. In its Bulletin No. 140 dated October 27, it figures the expenses of the first five American hyperscalers. It expects more than $800 billion in investments in 2026. This represents 2.5% of United States GDP. These five groups have also already issued $222 billion in bonds as of the end of September. For its part, Moody’s has $1.2 trillion in data center leasing commitments. Among them, 820 billion concern sites that have not yet been built.
So you see the problem. If the doubt that emptied Shanghai crosses the Pacific, it will not hit shares paid for in cash by individuals. It will rather affect bond arrangements, which the BIS itself estimates between 75 and 100 billion dollars off balance sheet.
Bitcoin and AI tokens facing the deflating Chinese bubble
Bitcoin did not wait for China to shake. It briefly slipped below $80,000 on Monday. That day, Brent exceeded $111 and the US ten-year yield was close to 5%. But expensive oil and expensive debt dry up the appetite for any risky asset. This is true in Shanghai as it is on a blockchain.
AI tokens have also taken the lead in the decline. We noted that they had lost 41% since March, well before the STAR 50 collapsed. The crypto compartment was selling itself like fuel for autonomous agents. However, he corrected before the actions supposed to produce these agents.
Asia has been setting the tone for several weeks. Goldman Sachs has reduced its target on the Korean Kospi by 25%. Furthermore, the Seoul Stock Exchange has increased trading suspensions in recent months. Bitcoin then fell back to $63,500 in the wake of the Korean crash.
But BTC is holding up better this time. At $80,900 this Wednesday morning, it remains above its 50-week moving average. This is the threshold that Galaxy Digital monitors to validate the end of the bear market. After all, a Chinese market largely closed to foreign capital moves less money than a teetering Nasdaq.
