Bitcoin fell sharply on Wednesday, dropping more than 6% and sliding below the $100,000 level for the first time since June. The decline came as global markets faced renewed pressure and investors moved away from risky assets. Concerns about tighter monetary conditions and slower economic growth have contributed to the shift in sentiment.
The drop in Bitcoin followed warnings from senior Wall Street executives who suggested that U.S. stocks could be headed for a major correction. Their comments added to fears that valuations across several markets have climbed too high in recent months.
U.S. stock indexes also closed lower. The S&P 500 fell 1.17%, while the Nasdaq Composite dropped 2.04%, led by declines in technology and semiconductor shares. The Dow Jones closed down 251 points at 47,085.24. Nvidia shares slid about 4%, adding pressure to the broader tech sector.
Shares of Palantir Technologies were also under pressure, falling more than 8% even though the company reported strong quarterly earnings. The decline appeared to be driven by profit-taking after the stock’s sharp rise earlier this year. Sentiment weakened further when investor Michael Burry, known for “The Big Short,” revealed new short positions against both Palantir and Nvidia.
As investors looked for safer assets, the U.S. dollar strengthened, reaching a four-month high against the euro. Treasury yields eased as demand for government bonds increased. The euro slipped to $1.148, and the British pound weakened after the U.K. finance minister signaled potential spending cuts in the upcoming budget.
Oil prices also declined, with U.S. crude settling at $60.56 per barrel and Brent crude at $64.44. A stronger dollar typically weighs on commodity prices, making them more expensive for global buyers.
Uncertainty around future Federal Reserve policy has added to market volatility. While the Fed recently cut interest rates, Chair Jerome Powell said there is no guarantee of another cut in December. Market expectations for a December rate cut have fallen from 94% to 65% in just one week.
Meanwhile, a U.S. government shutdown has delayed key economic reports, including the latest jobs data, making it harder for investors to assess the health of the economy.
Global markets also saw declines, with MSCI’s world equity index dropping 1.14% and Europe’s STOXX 600 edging lower. However, interest in artificial intelligence and major tech investments remains strong. Earlier this week, markets had gained after Amazon announced a $38 billion cloud partnership with OpenAI, showing that long-term optimism in AI continues even amid short-term market pressure.
