Morning Minute: Bitcoin Gives Back Election Gains as AI Stocks Slide

Preface

Markets reversed direction sharply after a brief post-election rally, as concerns about artificial-intelligence infrastructure and data-center oversight hit technology shares and spilled into crypto. Bitcoin fell below its pre-election level, major digital assets declined, and leveraged traders faced substantial liquidations. At the same time, privacy-focused coins proved comparatively resilient, while policy developments, product launches, and protocol revenue offered a reminder that the crypto sector’s story extends beyond daily price movements. This article reviews the market action and the developments reported alongside it, including the outlook for U.S. employment data and possible scrutiny of Trump family business interests. The central theme is a sudden shift in risk appetite: political news that had supported prices one day earlier became a source of uncertainty the next.

Lazy bag

Equities and crypto sold off together after investors reconsidered the pace and regulatory environment of the AI buildout. The S&P 500 fell 4.36%, the Nasdaq declined 5.52%, and Bitcoin dropped 5.4% to $75,871 in the main market account. More than $1.1B in crypto long positions were liquidated. Zcash and Monero fell less than the broader market and remained higher on the week, while traders turned their attention to Friday’s October jobs report. The day’s other developments included proposed congressional inquiries into Trump family business dealings, Solana Labs’ launch of a mobile trading app, and strong onchain protocol revenue.

Main Body

A rapid reversal in market sentiment

The market’s mood changed in the space of two sessions. On Wednesday, investors welcomed a Democratic Congress, sending stocks to their strongest daily performance in three months. Bitcoin climbed above $80,800, and Donald Trump wrote on Truth Social that the market had “just hit another Record High,” with 401(k)s “through the roof.” By Thursday, investors were reassessing the implications of the same election outcome.

The S&P 500 fell 4.36%, its worst session since the Liberation Day tariffs in April 2025. The Nasdaq dropped 5.52%, closing in correction territory after moving more than 10% below its record from the previous month. The Dow shed 1,833 points. By the end of the session, U.S. stocks had lost $3T in market value—more than the total market capitalization of crypto.

The selloff was particularly severe in semiconductor and AI-related shares. The iShares Semiconductor ETF declined more than 12%, its steepest one-day fall since March 2020. Micron lost 17.5%, AMD fell 17.3%, Marvell declined 16.4%, and Nvidia dropped 9.3%. The Magnificent Seven companies lost roughly $1 trillion in combined market value. The VIX reached 28.09 intraday, its highest level since March.

Investors’ concern centered on the prospect of slower approvals and closer oversight for data-center construction. Several states where Democrats won have active local opposition to new data centers, prompting traders to consider whether the AI infrastructure expansion could face more constraints. Ipek Ozkardeskaya of Swissquote summarized the concern: “We suspect there is going to be some scrutiny on this aggressive AI buildout.” Expectations around interest rates also shifted: the reported odds of a December hike fell to 70.1% from 82.7%.

Crypto follows equities lower

Digital assets were not insulated from the broader retreat. Bitcoin fell 5.4% to $75,871, below its level before the election. Ethereum dropped 7.6% to $2,239, a steeper decline than the Nasdaq. XRP lost 9.8%, Hyperliquid fell 4.9%, and the CMC20 index declined 6.29%. More than $1.1B in crypto long positions were liquidated during the day, followed by a modest overnight recovery.

The market snapshot also described major cryptocurrencies as down roughly 4-6%, with Bitcoin near $75.9k, Ethereum near $2,240, Solana at $90.1, and HYPE at $78.40. In that overview, ZEC was near $1,310 and down 1%. Another Bitcoin price panel listed BTC at $75,858, down 2.27%, with a 24-hour high of $76,892, a 24-hour low of $75,230, and volume of $1.7B. The panel’s market projections showed a 60% chance of Bitcoin trading between $74,000 and $76,000 both today and during the week.

Two privacy-focused assets showed relative strength. Zcash fell 0.8% and Monero declined 2.2%, both less than the wider market and both still up on the week. Over the past year, Zcash gained 146% and Monero rose 74%, while Bitcoin fell 26% and Ethereum lost 34%. Their performance suggests that interest in privacy-oriented assets remained active despite the broad risk-off move.

Policy and company developments

U.S. Representative Robert Garcia, expected to chair House Oversight under the new Democratic majority, said the committee would investigate Trump family business dealings, including crypto ventures. World Liberty Financial (WLFI) was identified as a likely early focus, with inquiries possibly beginning in February. The news brief also listed WLFI among the day’s stronger large-token movers, up 3%; PEPE was up 3% and ARB rose 4%.

Trump-backed American Bitcoin swung to a $126 million third-quarter profit from a $57.2 million loss in Q2. The reported driver was a $197 million gain on its bitcoin holdings as prices rose. Separately, Zcash’s NU7 upgrade is expected to permanently freeze about 12,224 ZEC, valued at roughly $15.6 million, by invalidating the only transaction format capable of moving coins out of Sprout, the chain’s original 2016 privacy pool. The upgrade also reduces target block time from 75 seconds to 25 seconds.

Solana Labs launched Leap, a mobile app for around-the-clock trading of tokenized stocks, ETFs, metals, currencies, and crypto. The app was built by the Dialect team, which Solana Labs acquired this year. A separate report said China’s central bank halted Solana’s planned Accelerate China 2026 events in Shanghai and other cities and would investigate domestic entities responsible for placing project advertising in the Lujiazui financial district.

Funds, tokens, and onchain activity

Spot investment products also recorded outflows: Bitcoin ETFs saw $430M in net outflows on Thursday, while Ethereum ETFs recorded $100M in outflows. In meme tokens, performance was mostly negative. DOGE fell 6%, SHIB declined 4%, PEPE gained 3%, PENGU lost 7%, TRUMP fell 2%, SPX dropped 5%, and BONK declined 4%.

Tokens associated with the Robinhood chain were also mostly lower. Pons fell 12% to $128M, Cashcat declined 8% to $94M, and AI dropped 23% to $40M; HOOKR rose 20% and Priors gained 8%. Solana’s reported top movers included BIRB, up 32%; COGE, reported at 78x; and Diamond, up 900%. Cards declined 25%, surrendering recent gains.

Among onchain protocols, Hyperliquid led reported revenue with $2.72M, followed by Pump.fun at $1.35M and Papertrade at $822k. Lighter recorded its second-highest day of revenue since early February, generating $314k. Pump.fun opened business-development roles focused on perpetual futures, prediction markets, and a trading terminal, signaling expansion beyond memecoins. It also introduced a Diamond mode for callouts, rewarding calls involving higher market capitalizations and longer-term holds.

NFT market leaders were mixed. Punks were unchanged at 30.4 ETH, BAYC fell 1% to 5.6 ETH, and Pudgy remained unchanged at 2.25 ETH. Normies rose 4% to lead the reported movers.

What investors were watching next

Oil rose 2% to $90, while gold fell 1% to $4,080. Stock futures were described as rebounding after the previous session’s sharp selloff, with the Dow at -0.9% and the Nasdaq at +1.6%. The next major scheduled focus was Friday’s October jobs report. After markets interpreted the same political outcome in sharply different ways within two sessions, employment data offered a near-term test of how investors assess economic conditions and the outlook for policy.

The session underscored how closely crypto can move with technology shares during periods of broad risk aversion, while also revealing meaningful differences among individual assets and sectors. Liquidations amplified the move in digital assets, but relative resilience in privacy coins and continuing activity across trading protocols showed that not every part of the market responded identically. With questions about AI investment, regulation, and economic data still unresolved, the immediate direction remained uncertain.

Key Insights Table