Bitcoin: Why are the American elections shaking the crypto market?

Bitcoin threatens to record a fifth consecutive week of decline after falling below $77,000. More than just a weakness in the crypto market, this movement reveals growing exposure to US technology stocks, ETF flows and political uncertainties surrounding the midterm elections.

Five weeks of decline reveal deeper pressure

Bitcoin fell around 2% on Tuesday morning in Asia, erasing its rebound from the day before. Its price returned to around $76,500, near the low reached after the Binance hack, as investors simultaneously reduced their exposure to cryptos and tech stocks.

The decline now extends well beyond one session. Bitcoin recorded four decreasing weekly closes, successively falling from around $86,530 to $83,773, then to $82,116, $80,154 and $78,354. He now risks ending a fifth week in the red.

Several indicators show that the pressure no longer comes only from the crypto sector:

• Bitcoin is moving below the psychological threshold of $77,000;
• The Nasdaq 100 has fallen 10% since its last peak;
• The US chipmaker index lost 12% in three sessions;
• US bitcoin ETFs suffered two strong days of withdrawals;
• The results of the US elections could change the regulatory timetable.

Spot ETFs have recorded $643.3 million in net outflows on October 30then around 398.6 million on November 2. BlackRock’s IBIT fund concentrated most of the second movement with $405.3 million withdrawn, while the majority of other products remained stable.

This concentration constitutes an important signal. Institutional investors are not exiting all ETFs uniformly, but redemptions from a single dominant product are enough to weigh on overall demand. Bitcoin thus finds itself dependent on allocation decisions taken in the same portfolios as large technology stocks.

Doubt about AI now transfers to bitcoin

The correction in the American market accelerated with the decline of semiconductor manufacturers and concerns about spending on artificial intelligence. Investors are wondering whether the hundreds of billions committed to data centers and chips will generate revenue quickly enough.

The Nasdaq had already lost 5.3% in October. Jake Dollarhide, Managing Director of Longbow Asset Management, estimated that companies must recognize “that there is a limit to their spending” and the additional value created for their shareholders. Beyond this limit, he warns, the investment becomes mainly a burden.

Apple reinforced these concerns despite quarterly results beating expectations. The group forecast a gross margin of between 45% and 46% for the holiday quarter, compared to 46.9% expected by the market. He also has reported a slowdown in its Services activity and an exceptional increase in the cost of computer memories.

The effect has spread to Asia. South Korea’s Kospi lost more than 3%, while Taiwanese markets and several component suppliers also fell. Bitcoin followed this movement, even though the drop in oil would normally have reduced inflation expectations.

This reaction confirms that BTC is still treated as a risky growth asset during general exposure reduction phases. Its programmed scarcity is not enough to protect it when investors sell the most volatile assets to strengthen their cash flow.

The ballot can remove a risk without bringing back buyers

The US mid-term elections add a layer of uncertainty. A Democratic victory in the House of Representatives could block part of Donald Trump’s agenda and reduce the chances of new crypto-friendly laws being passed before 2028.

The result may nevertheless produce temporary relief, whichever majority you choose. Once the composition of Congress is known, investors will be able to better assess the future of regulatory texts, taxation and platform control.

However, this clarification will not be enough to bring about a lasting recovery. Bitfinex analysts estimate that “stock developments will likely determine bitcoin’s fluctuation zone this week”.

Three confirmations will be necessary: ​​a slowdown in ETF outflows, a stabilization of the Nasdaq and a return of bitcoin above $78,500 to $80,000. Without these signals, a post-election rebound could remain limited to the temporary disappearance of political uncertainty.

The fifth week of potential decline therefore tells a broader story than that of Bitcoin. The crypto market has become an extension of the debate over the valuation of tech, the profitability of spending on AI and the ability of institutional investors to maintain their positions when risk aversion increases.