Bitcoin held steady above $75,000 on Friday as concerns over potential U.S. regulation of artificial intelligence spilled over into Asian markets, prompting South Korea to unveil measures aimed at curbing stock market volatility.
The cryptocurrency traded near its 50-week simple moving average (SMA) at $75,733, according to data from TradingView.
The digital asset experienced a sharp decline of up to 6.6% on Thursday, mirroring a broader sell-off across U.S. stock markets. Both the S&P 500 and the tech-heavy Nasdaq Composite closed down 4.4% and 5.5%, respectively.
Asian Markets Extend Sell-Off
Asian stock markets continued the downward trend on Friday. South Korea’s KOSPI Composite Index plunged over 8% shortly after opening, triggering a circuit breaker that temporarily halted trading for 20 minutes. The index later pared some losses, closing 6% lower at 5,059.69 points, its lowest level since March 31.
South Korea Intervenes
In an emergency meeting, South Korea’s Deputy Prime Minister and Finance Minister Lee Hyoung-il announced a series of measures designed to mitigate forced selling in the market. Local media reported that brokerages would be granted a three-month exemption from the requirement to maintain a 140% collateral ratio on margin loans, effective Monday. Authorities also indicated readiness to implement further measures should volatility escalate.
“We recognize with gravity the expanding volatility in global stock markets following the U.S. midterm elections,” a government source was quoted as saying by Chosun.
AI Regulation Fears Drive Tech Sell-Off
Analysts attributed Thursday’s losses on Wall Street to anxieties surrounding potential tighter regulation of artificial intelligence, following the Democratic Party’s victories in the House and Senate. These concerns exacerbated existing market worries about the sector’s capital expenditure.
Market commentary service The Kobeissi Letter, citing an X post by Democratic Representative Yassamin Ansari who advocated for a “pause on advanced AI development,” suggested that an outright U.S. ban on AI was improbable.
“In our view, a ban of AI will not happen in the US (with near-certainty),” The Kobeissi Letter stated in an X post. “Such a ban, if even possible to enforce, would mean the US surrendering its position in the global AI race to China. That won’t happen.”
Kobeissi further noted that Thursday’s declines were predominantly concentrated in the technology sector, with the S&P 500 falling only about 2.5% when excluding tech stocks. The Philadelphia Semiconductor Index, which tracks 30 semiconductor companies, ended Thursday down 12.2%.
Economist Mohamed El-Erian also emphasized the need for lawmakers to find common ground on AI policy.
“America’s ‘let it rip’ approach to AI aligns with the technology’s productivity potential and national security imperatives. However, it has fallen short not only on safety and diffusion, but also on bringing society along,” he wrote in a Substack note, adding that the backlash reflected “genuine concerns,” information failures, and behavioral factors.
Cointelegraph previously reported that Democratic midterm victories under Republican presidents have historically been followed by strong stock market returns. Bitcoin’s correlation with the S&P 500 has also strengthened in recent months.
Leave a Reply