Bitcoin dropped below $74,000 as more than $297 million in BTC long positions were liquidated over a 12-hour period, according to Coinglass data. The decline comes as Nvidia, the leading AI chip supplier, faces new uncertainty tied to allegations involving its CEO, Jensen Huang.
Bitcoin and Nvidia Under Pressure
BTC briefly dipped below $74,000 amid thin trading, failed to recover above $75,500, and then fell below $74,000 again. At the time of writing, bitcoin was trading near $73,800, down almost 3% in 24 hours.
Stock futures and Asian markets shrugged off the news within hours, with stock indexes rising Monday morning before giving up some gains. Before the U.S. market opened, however, NVDA-USDC perpetual futures on Hyperliquid had dropped almost 6% in 24 hours, and Nvidia's tokenized stock, NVDAX, was also down around 6%. Nvidia shares are down 10% in a week, 19% in a month, and 6% in a year.
Investigation Into Possible Espionage
At the center of the story is not the affair itself but a possible Chinese espionage attempt. In October, The New York Times alleged that China's Ministry of State Security recruited Alice Huang, or Huang Le, to gather intelligence on Nvidia's founder. China denies the allegations, while Nvidia's board said Sunday that it was initiating "an independent investigation" into them.
"While the Board has no reason to believe that either national security or NVIDIA secrets were compromised, the Board's inquiry will examine all available information," Nvidia's board said. The company has said it does not have a formal succession plan for Huang.
AI Sector's Effect on Bitcoin
Although bitcoin has no direct links to Nvidia, the company is the leading AI stock, and many large publicly traded bitcoin miners have pivoted to AI computing. Last week, BTC fell from above $80,000 to below $76,000 as chip and AI stocks sold off amid the Democratic midterm sweep and uncertainty over further AI sector expansion in the U.S.
Outflows from bitcoin ETFs neared $1.3 billion last week, compared with $203 million in outflows a week earlier. Some market players claim the crypto asset market might benefit from a downturn in the U.S. tech and AI equity sector, with investors pivoting liquidity to digital assets.
Support for Huang
Huang has received support from prominent entrepreneurs, including Tesla and SpaceX chief Elon Musk, who agreed that "Jensen is irreplaceable for America's AI leadership." Entrepreneur, investor, and Bitcoin advocate Anthony Pompliano said, "We are watching the two top intelligence agencies play chess on the geopolitical stage," adding, "Sit back and enjoy the show."
