Markets turned risk-averse on Tuesday, sending Bitcoin to its lowest level since late 2024 and dragging US stocks lower as investor nerves resurfaced around artificial intelligence spending and rising geopolitical tensions.
Bitcoin fell nearly 7% in 24 hours, briefly dipping below $73,000, before stabilizing just under $75,000. The move leaves the world’s largest cryptocurrency down more than 40% from its October peak above $126,000 and over 15% lower year-to-date.
Traders said liquidations accelerated the selloff after dip-buying bets failed to hold above key technical levels.
“A lot of traders were trying to buy the dip above $80,000,” said FalconX derivatives trader Bohan Jiang. “As bitcoin drifted lower, those positions were liquidated, putting more pressure on prices.”
Stocks stumble as AI doubts resurface
US equities sold off alongside crypto:
- Dow Jones fell 360 points (-0.7%)
- S&P 500 dropped 1.25%
- Nasdaq slid 2%
Losses were led by large-cap tech and AI names. Nvidia fell 4.1%, while Microsoft and Amazon dropped 3.2% and 2.4%, respectively.
Investors continue to question whether massive AI spending will translate into sustainable profits, especially after recent earnings disappointed expectations.
Gold surges as bitcoin falters
While crypto and stocks weakened, precious metals jumped sharply:
- Gold futures surged 6.8% to around $4,970 per ounce
- Silver jumped 10% to near $85
Gold has now outperformed bitcoin over the past five years, reinforcing its role as the preferred hedge during periods of currency debasement and geopolitical stress.
“Bitcoin’s divergence from gold shows investors still treat it as a high-beta risk asset, not digital gold,” said Hashdex analyst Gerry O’Shea.
Volatility spikes on Iran tensions
Market volatility accelerated after reports that the US military shot down an Iranian drone approaching a US aircraft carrier. The VIX volatility index jumped 19%, briefly crossing the key 20 level.
Oil prices climbed on the headlines, with Brent crude rising 1.9% and WTI up 2.2%.
Bitcoin’s slide highlights how fragile risk appetite remains, even with a pro-crypto US administration. For now, crypto continues to trade like a leveraged risk asset, while gold is reclaiming its role as the market’s primary refuge amid geopolitical stress and AI-driven uncertainty.
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