With broader risk-off sentiment rippling through financial markets, Bitcoin on Tuesday fell more than 6% to slip below $100,000 for the first time since June.
According to foreign media reports, major United States (US) stock indexes also dropped, registering a decline in tech and chip stocks after Goldman Sachs and Morgan Stanley CEOs warned that equities may be due for a pullback.
The cautious mood sent Treasury yields lower as the US dollar climbed to a four-month high against the euro, adding pressure on risk assets, including cryptocurrencies.
The drop in bitcoin highlights growing investor caution in the face of tightening monetary conditions and market volatility, prompting some traders to reduce exposure to high-risk assets.
At an investment summit in Hong Kong, bank CEOs warned of the prospect of a stock market correction of more than 10% over the next two years.
Shares of Nvidia were down 4%, while an index of semiconductors also fell 4%.
Shares of Palantir Technologies PLTR.O dropped more than 8% despite the data analytics provider reporting strong quarterly results.
The company, which has more than doubled in value this year, forecast fourth-quarter results above market expectations as the rapid adoption of artificial intelligence is boosting demand for its services.
“Big Short” investor Michael Burry, known for his successful bets against the US housing market in 2008, has placed bearish bets on Nvidia and Palantir, according to a regulatory filing on Monday.
The S&P 500 fell more than 1% and the Nasdaq dropped more than 2%. The Nasdaq is still up about 21% for the year so far.
“The market’s been moving higher as warranted from an earnings standpoint, but at some point … it seemed like it was kind of positioning for a risk-off pullback even on the slightest disappointment,” said Keith Buchanan, senior portfolio manager at Globalt Investments.
The Dow Jones Industrial Average fell 251.44 points, or 0.53%, to 47,085.24, and the S&P 500 fell 80.42 points, or 1.17%, to 6,771.55, and the Nasdaq Composite fell 486.09 points, or 2.04%, to 23,348.64.
MSCI’s gauge of stocks across the globe fell 11.51 points, or 1.14%, to 996.34.
The pan-European STOXX 600 index fell 0.3%.