U.S. stocks and crypto plunge 5–7% as Democratic sweep raises AI regulation concerns; $879.92M in crypto positions liquidated in four hours.
Regulation & Gov ·
Democratic control of both chambers of Congress triggered a sharp selloff across equities and digital assets, driven by investor concerns over potential AI regulation and planned investigations into Trump-connected business interests involving crypto. Major U.S. indices retreated in intraday trading, with the Nasdaq down 5.10%, the S&P 500 sliding 3.43%, and the Dow falling 2.41%. Bitcoin and Ethereum saw steeper declines, with BTC dropping 5.97% to $75,695.68 and ETH falling 7.29% to $2,247.74.
The downturn triggered cascading liquidations in leveraged positions across the crypto market. Over four hours, $879.92 million in positions were unwound, comprising $818.90 million in long liquidations and $61.02 million in short closures, according to CoinGlass monitoring. The 24-hour liquidation toll reached $1.03 billion across 198,192 trader accounts, with Binance's ETHUSDT pair recording the largest single position closure at $10.94 million.
The rapid unwind underscores how political developments can trigger sudden shifts in sentiment across interconnected asset classes. Whether the selloff stabilizes or deepens depends partly on whether regulatory specifics emerge and whether perceived risk to crypto-affiliated interests materializes into concrete legislative action.