Bitcoin fell to $71,200 on November 12 (UTC), hitting a nearly 12-week low. The decline was driven by a confluence of negative factors: news of the departure of Nvidia founder and CEO Jensen Huang triggered a broad sell-off in tech stocks, which in turn impacted the cryptocurrency market.
On the same day, MSCI confirmed that it would remove Strategy from its global equity indices, a move expected to trigger a wave of selling by passive funds and index-tracking funds. The crypto market recorded $750 million in forced liquidations amid this chain reaction, reflecting how investor sentiment toward risk assets has spread across the entire asset class.
The correlation between tech stocks and crypto assets has once again come into focus. The news of Huang’s departure not only shook the confidence of Nvidia investors, but its spillover effects also impacted crypto funds and derivatives positions heavily weighted toward tech stocks, exacerbating market volatility.
Cover image: Marko Ahtisaari / Wikimedia Commons (CC BY 2.0)