Bitcoin falls to $69,745 as Nvidia CEO resignation spooks markets
Bitcoin fell to $69,745 on Friday, down 3.8% over 24 hours, as risk aversion swept markets following the resignation of Nvidia CEO Jensen Huang. The world's largest cryptocurrency came under pressure as investors fretted over the future of the artificial intelligence sector and pulled money from bitcoin exchange-traded funds.
Huang stepped down as chief executive of the world's biggest chipmaker amid revelations of three extramarital relationships, two with company employees and one with an executive accused by the US government of being a Chinese spy. Nvidia shares fell 4.3% on Thursday on concerns about the company's future after the departure of its founder. The scandal has been seen by some as the trigger for a potential AI bubble bursting in stock markets.
"It is natural for investors to worry about a possible bubble in the AI market, because it is a sector that has grown very fast in recent years, which has been reflected in fairly inflated prices of stocks exposed to the theme," said Vinicius Bazan, CEO of Underblock. He argued the situation is not comparable to the dot-com bubble of the early 2000s. "The AI segment is inflated, but it is the result of very accelerated growth. We have real things being delivered there."
Bazan said the impact on crypto is indirect, as many investors correlate digital assets with the broader technology sector. "We often see a high correlation between these two markets in terms of price. So an eventual bursting of the AI bubble would spill over into crypto," he said. He also pointed to a series of negative news for cryptocurrencies in recent weeks: rising projections that the Federal Reserve will have to raise US interest rates in December, the $6.3 billion hack suffered by Binance, and the Democrats' victory in the US midterm elections.
US spot bitcoin ETFs recorded a net outflow of $80.3 million on Thursday, the sixth consecutive trading day of capital exits. The biggest sellers were Fidelity's FBTC with $32.6 million, Bitwise's BITB with $26.4 million and Ark Invest's ARKB with $18.5 million. Ether ETFs also saw a net outflow of $8.5 million, also the sixth straight day of selling. The crypto Fear & Greed index fell from 24 to 20 points, deepening into "fear" and nearing the threshold of "extreme fear".
As of 10:46am Brasília time, bitcoin was down 3.8% over 24 hours at $69,745.
What it means for Pakistan: Pakistani crypto investors and traders who hold bitcoin or use offshore exchanges will feel the pinch of this global risk-off move, with the price drop and ETF outflows reinforcing caution. The episode also underscores the volatility that Pakistan's virtual asset regulator, PVARA, must weigh as it builds a licensing regime for VASPs, and the risks for users exposed to platforms like Binance, which suffered a $6.3 billion hack. For now, the State Bank's restrictions on crypto payments remain in place, and any spillover into remittances or local sentiment is indirect.
