A tech sell-off hammered the crypto market and called the AI boom’s economics into question. Why is Bitcoin tied to the stock market again?
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On Thursday, November 5, Bitcoin plunged below $76,000 as U.S. stocks tumbled. Investors are pulling out of tech stocks in droves: doubts are growing about the economics of the AI industry, which companies have already poured billions into, and it is still unclear when that money will come back.
The sell-off began in the tech sector. The Nasdaq lost 5.5%, the S&P 500 dropped 4.4%, and the semiconductor index sank about 12%. Nvidia shares fell 9.3%, while AMD dropped 17.3%.
🚨 BREAKING: The AI crash is hitting 7 markets at the same time. This is what 2008 looked like in week 1. A few hedge funds. A -10% drop. Nobody called it a crisis. 1/ US: Nasdaq -5.5% today, -11.9% from its October record. Nasdaq 100 -6.4%. S&P 500 -4.4%. The fear index jumped 63%. 2/ CHIPS: US chip stocks -12.3% in one day. Nvidia -9.3%, now $1.39 trillion below its record. 3/ SOUTH KOREA: KOSPI -5.3%, program trading halted. Down 42.6% from its June record. SK Hynix -58% from its high. Samsung -46%. 4/ KOREA IN NEW YORK: Korea's main US-listed fund fell 12.6% after Seoul closed. More than double Seoul's own drop. Seoul opens again in a few hours. 5/ TAIWAN: -3.2% today. -8% this week. 6/ JAPAN: Nikkei -1.8% today. -5.5% this week. 7/ CRYPTO: Bitcoin -5.6%, under $76,000. $870 million in leveraged bets wiped out in 4 hours. Now zoom out. Big Tech will spend over $800 billion on AI this year. $227 billion in one quarter alone. Over $2 trillion planned in 2 years, with about $600 billion of cash. Their free cash flow just went negative for the first time ever. The revenue is not there. The smart money sold first. Retail bought it on borrowed money. In July, 360,000 Korean accounts were force-sold. KOSPI is now below that July low. In 2008 the Nasdaq was already -24% when Lehman fell. Then it fell another 42%. Nobody is calling this a crisis yet. But Korea's market officials already plan for the day KOSPI falls 20%. That is when they shut the market. Goldman says hedge funds sold every AI stock they bought since 2025, in 5 sessions. Morgan Stanley says hedge funds cut risk harder than in any October in at least 10 years. Inflation is 3.7%. Oil is near $99. No easy rescue this time. This is not a dip. This is just the beginning. I'm posting every market that breaks next and every forced sale as it happens. Follow me, and send this to anyone still buying the dip.
— Whale News Daily (@WhaleNewsDaily) November 5, 2026
Donald Trump called the day one of the worst days in history and linked the sell-off to Democrats’ victory in the midterm elections.
“But the American market will soon be bigger and stronger than ever,” he said.
On Wednesday, right after the election, stocks were still rising. Investors reassessed the fallout the next day: Democrats won majorities in both chambers of Congress, and the market fears they will be able to curb the growth of AI infrastructure. Rising borrowing costs and the debt of the companies building that infrastructure added to those fears.
Bitcoin, which was trading near $80,000 in the morning, slid below $76,000 and lost 5.3% over 24 hours. CoinGlass recorded $1.3B in liquidations. About $1.1B of that came from long positions, or bets on a price rise.
Investors pulled $430M out of U.S. spot Bitcoin exchange-traded funds, of which about $305M came from Fidelity and BlackRock funds.
Miners that are retooling their businesses for AI were hit hardest. An hour after the opening bell, shares of IREN, Cipher Mining, TeraWulf, and CleanSpark were down 13–14%, and Keel Infrastructure was down 17%.
Gold proved to be a safe haven: it rose 0.6% to $4,100 per ounce, and at one point it was up more than 1%.
Bitcoin turned out not to be an alternative to the financial system but, in effect, its hostage. There was no decoupling; what happened was correlation, and Bitcoin fell in step with the stock market’s fears.
So the crypto market increasingly depends on the success of a few Wall Street funds. In other words, the technology is decentralized, but the money behind it is very much centralized.
We don’t think the AI bubble is bursting yet. What is bursting looks more like a bubble of expectations that this sector will deliver an endless stream of money. Companies are borrowing billions for infrastructure while there is still no sign it will turn a profit. Crypto miners are shifting to AI data centers, so the moment doubts surface about whether AI will pay off, both industries get hit at once.
You can discuss the threat of AI from completely different angles, but the danger here lies elsewhere: investors could go bankrupt before these technologies start paying off at all. There is still too little tangible evidence that these investments are justified.
This post is for informational purposes only and does not constitute advertising or investment advice. Please do your own research before making any decisions.
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