Tech Rout Spreads to Crypto: Bitcoin Breaks Below $71,000 Amid AI Investment Fears
Bitcoin tumbled below the $71,000 threshold on Thursday, erasing recent gains as a deepening rout in technology shares worldwide prompted a broad flight from risk-sensitive assets.
The leading cryptocurrency dropped as much as 7.5% in 24 hours, briefly touching near $70,700, according to CoinDesk data. The decline mirrors a wave of pessimism sweeping through equity markets, where the high-flying AI sector is now facing intense scrutiny over its valuation and growth trajectory.
The contagion from equities was unmistakable. MSCI's Asia tech index fell for the fifth time in six sessions, with South Korea's Kospi plunging around 4% as major AI-related stocks slumped. This followed a weak session on the Nasdaq, where disappointing earnings from tech giants like Alphabet and Qualcomm stoked fears that the AI investment boom may be reaching its zenith sooner than anticipated.
Analysts note that Bitcoin has increasingly behaved like a high-beta tech stock during periods of market stress, especially when macroeconomic uncertainty rises. "The correlation is hard to ignore," said market strategist David Chen. "When liquidity tightens and tech leads the sell-off, crypto, particularly Bitcoin, often gets caught in the crossfire. It's a reminder that its 'digital gold' narrative is still tested against its risk-asset characteristics."
The pressure was compounded by a parallel meltdown in commodities, where silver crashed over 17% and gold fell more than 3%. This brutal unwind triggered heavy liquidations in tokenized metal products on crypto exchanges, exacerbating the market-wide deleveraging.
"The break below $71,000 accelerated a flush-out of the overly optimistic positioning built after the ETF approvals," explained Wenny Cai, COO at Synfutures. "We're seeing a shift from narrative-driven buying to balance-sheet mechanics—forced selling and liquidations are dominating price action now. This isn't the end of institutional interest, but it's definitely the end of easy complacency in this market."
Market Voices
Michael Rourke, Portfolio Manager at Horizon Capital: "This is a healthy correction and a necessary consolidation. The AI and crypto rallies had gotten ahead of fundamentals. This pullback washes out weak leverage and sets a stronger foundation. I'm viewing dips as accumulation opportunities for quality assets."
Lisa Park, Independent Retail Trader: "It's incredibly frustrating. One minute we're talking about new all-time highs, the next everything is crashing together—stocks, crypto, metals. It feels like the algorithms are just herding us all into the same exits. Where's the diversification we were promised?"
Dr. Aris Thorne, Economics Professor: "This synchronized decline highlights the interconnectedness of modern speculative assets, all buoyed by similar liquidity conditions. The market is questioning whether AI profitability can justify current valuations, and that doubt is rippling through every asset class perceived as 'growth.' It's a classic risk-off moment."