Bitcoin slips below $70,000 as Nvidia turmoil and rate fears hit risk assets
Bitcoin fell below $70,000 for the first time since August on Friday, extending a two-day decline to 9% as another sell-off in chipmaker stocks weighed on demand for riskier assets. The largest digital asset dropped as much as 4.1% to $68,490 by midday, its lowest level since 19 August, adding to a 3.8% fall on Thursday.
Roughly $1.3bn of bullish cryptocurrency bets were liquidated over 24 hours, according to data compiled by Coinglass, with forced selling by leveraged traders deepening the slide. "Once it fell below $70,000, there was a drop of more than $1bn in leveraged long positions, which pushed selling further," said Sean McNulty, a derivatives trader at market maker AQC Tech. Ether, the second-largest cryptocurrency, fell as much as 6% and slipped back below $2,000.
A key gauge of leading semiconductor companies dropped 6%, with Nvidia again hit by uncertainty over its future after the dramatic removal of Jensen Huang. The Nasdaq 100 lost 2%, while short-term Treasury bonds fared better. "This is a deleveraging unwind, and bitcoin has no buyer of last resort," said Matthew Sigel, head of digital asset research at VanEck. "Slightly more restrictive comments, plus concern about debt deflation linked to Nvidia, are hitting markets as the BTC-Nasdaq correlation sits near multi-year highs. The 200-day moving average support at $73,000 has now broken."
Bitcoin's weakness reflects a convergence of macroeconomic pressures on crypto in recent weeks. High oil prices and persistent inflation have reinforced expectations of further Federal Reserve rate rises, and the prospect that Democrats could regain control of both chambers of the US Congress next year, after the midterm elections, has raised expectations of greater regulatory scrutiny of the sector. This week a key US consumer price indicator posted another significant advance in October, keeping the Fed on course to raise rates next month. Core CPI rose 0.3% month on month, beating estimates for a third consecutive month, while headline prices rose 0.4% on broad increases in commodity costs.
"If the Fed raises rates by 50 basis points instead of the expected 25 basis points, bitcoin and other cryptocurrencies could have more room to fall," said Jeff Mei, chief operating officer of cryptocurrency exchange Btse. Rich Rosenblum, co-founder of crypto market maker GSR, said volatility in artificial intelligence trading and continued US dollar strength have knocked out some bitcoin long positions, while elevated inflation data and changes in Nvidia's leadership are also weighing on risk assets. Institutional buyers have also retreated over the past two weeks: since 30 October, US-listed spot bitcoin exchange-traded funds have recorded net outflows of more than $2.5bn. "As high-quality stocks and big-tech favourites correct — for example, Nvidia and Google — and Treasury yields rise, there is no reason to own an asset that generates no income and whose gains are based on speculation," said Michael O'Rourke, chief market strategist at JonesTrading.
What it means for Pakistan: For Pakistani crypto holders, the move is a reminder that bitcoin's link to US tech shares transmits global risk sentiment straight into local portfolios, and that leveraged positions can be wiped out in hours. It also lands as Pakistan works out its own virtual asset framework under PVARA, with the State Bank's long-standing restrictions on bank channels for crypto still in place; a sustained pullback in prices and ETF outflows abroad may temper appetite among local investors while regulators finalise licensing and compliance rules.
