coindesk.com
Bitcoin BTC$68,817.63 sank to $68,000 overnight, its lowest price since August, extending a slide of more than 20% since early October amid a string of market shocks that are weighing on the largest cryptocurrency.
Recent market turmoil stemming from the scandal at Nvidia, the world’s most valuable stock, has weighed on the AI trade. Meanwhile, stubborn inflation and political uncertainties following the U.S. midterm election have pressured the broader market. However, there is another event that may be playing a bigger role in the selloff at the moment: Anthropic’s upcoming red-hot stock market debut.
"In my view, the latest dip can be attributed to the opening of Anthropic's subscription books — which received six times more orders than shares available — pulling capital out of liquid markets to chase what is set to become the largest public listing in history, by a wide margin," Seamus Rocca, CEO of Xapo Bank, said.
Investors scrambling for an allocation in the AI company's IPO, which is looking to raise as much as $64.4 billion, may be selling bitcoin and other liquid assets to free up cash, according to Rocca. He compared the rush for Anthropic shares to the SpaceX IPO earlier this year, which he said temporarily drained liquidity from bitcoin as investors moved money into the offering.
"When an IPO of this scale comes to market, the lure of a quick return is strong, and liquid assets like bitcoin are often the first source of funding when investors scramble for allocations," he said.
Tech stocks and Strategy add to the pressure
Rocca also cited swings in tech valuations following Jensen Huang's sudden departure from Nvidia, recent cybersecurity incidents and the prospect of Strategy's removal from MSCI global indexes as factors weighing on sentiment.
But some analysts see no direct reason for Nvidia's troubles to drag down bitcoin. Instead, they point to a broader rush to cut risk across markets.
"There’s no direct impact," said Mark Connors, chief investment strategist at Risk Dimensions. "Gold's decline shows me it is a wholesale derisking deleveraging of the AI trade."
Chris Sullivan, co-portfolio manager at Hyperium Decimus, agreed. "There really is no logical connection," he said.
Sullivan instead pointed to rising bets against bitcoin, with short open interest exceeding the August peak, alongside large outflows from BlackRock's iShares Bitcoin Trust (IBIT). He also cited extreme fear in crypto markets and the prospect of a 50-basis-point rate hike in the next 30 days.
The selloff has also hit the metals market alongside crypto, adding to the view among some that investors are dumping riskier assets across the board rather than reacting to bitcoin-specific news.
