Bitcoin slides 4% amid a 6.7% sell-off in chip stocks and surging oil prices

• Selling pressure spread across cryptocurrencies, sending Bitcoin down 4% to $81,360, as higher oil prices, US-Iran tensions and worries about AI expenditure weighed on sentiment.
• Losses extended to altcoins following these developments: Ethereum, XRP and Solana each shed over 4%, while Zcash slid 10.6%.
• Investor caution over AI infrastructure expenditure weighed on Nvidia and Meta, which lost 4.4% and 7%, respectively.

A wider market sell-off spilled over into cryptocurrencies on Thursday, pushing Bitcoin (BTC) below $82,000. Sentiment weakened amid worries about artificial intelligence (AI) expenditure, higher oil prices and intensifying geopolitical tensions between the US and Iran.

How are fresh macro pressures weighing on Bitcoin below $82,000?

With macroeconomic worries weighing on digital asset prices, the leading cryptocurrency shed 4% to trade at $81,130. Coinglass data showed that the slide triggered approximately $474 million in crypto futures liquidations over the past 24 hours.

Pressure intensified across altcoins as well. Ethereum (ETH) lost 4.4% to $2,376, while XRP shed 5%, BNB retreated 2.8% and Solana (SOL) declined 4.1%. Losses in Zcash (ZEC) and Hyperliquid (HYPE) stood at 10.6% and 4.8%, respectively.

The downturn also hit AI-linked cryptocurrencies. Over 24 hours, NEAR Protocol (NEAR), Bittensor (TAO) and Render (RENDER) recorded declines of 9%, 8% and 7%, respectively.

Why are AI spending worries hurting technology stocks?

US equities weakened alongside the renewed pressure, with declines of 2.6% in the Nasdaq and 1.2% in the S&P 500. Even stronger-than-expected revenue failed to prevent a 7% slide in Meta Platforms (META) shares. Investors remained concerned about mounting AI expenditure and the company’s plans to fund its expansion by issuing new shares.

A 6.7% fall in the Philadelphia Semiconductor Index, the benchmark for US chip companies, underscored the extent of the pressure. Nvidia (NVDA) shed 4.4%, while SpaceX (SPCX) and (TSLA) lost 9% and 3%, respectively, despite positive Q3 earnings.

Investors are increasingly assessing infrastructure expenditure and funding needs rather than focusing solely on demand. The sell-off indicates that robust demand for AI technology may no longer be enough to reassure the market.

Calling demand for AI cloud infrastructure “off the charts”, Nvidia CEO Jensen Huang spoke in an interview with CNBC that underscored both the industry's robust demand and the financial difficulties confronting infrastructure providers.

Uncertainty also increased as geopolitical tensions persisted between the United States and Iran. Fears that a potential escalation of the Middle East crisis could disrupt supply chains drove Brent crude up 3.7% to $112 per barrel.

Demand for safer assets during the market turmoil pushed the US 10-year Treasury yield below 5%. While lower yields typically indicate stronger demand for existing government bonds, they do not necessarily point to improving economic conditions.