Analysis: The Bitcoin market is experiencing a healthy pullback, with new entrants panic selling.

According to data from Vanda Research, U.S. retail investors shifted sharply to buying near the close on Thursday, with net purchases exceeding $100 million in the final 10 minutes. However, retail investors still recorded a net sell of $151 million for the full day by market close. About an hour before closing, retail selling volume was on track to hit the worst single-day sell-off since the early pandemic panic. For comparison, the record single-day net sell by retail investors during the 2020 pandemic period stood at $502 million.

According to Bloomberg, Wall Street trading desks had previously expected that after the U.S. midterm elections, off-exchange funds would re-enter the market, driving a recovery in U.S. stocks, but the market subsequently sold off. The Nasdaq 100 index fell 6.4% on Thursday, its largest drop since 2020, erasing roughly $2.3 trillion in market value. The sell-off spread to other markets, with Asian benchmark stock indexes falling nearly 4%, while UK and European markets saw relatively smaller declines. Investors are concerned that the Democrats' landslide victory in the elections, along with public opposition to data center expansion, will slow AI buildout. Positioning, sales by systematic investors, and rapid unwinding of crowded hedge fund bets may also explain the speed and scope of the sell-off. Bruno Schneller of Erlen Capital Management warned that as losses mount, risk managers may force funds to cut exposure, which could trigger another sell-off regardless of fundamentals. In credit markets, ING is seeking to offload a roughly $500 million portfolio of data center loans in a single transaction. The sale comes days after the Democrats swept the midterms, stoking concerns about the future of many such projects. However, as of press time, U.S. stock futures and some AI-related stocks were rebounding in pre-market trading on Friday. Nvidia rose 4.3%, Broadcom gained 5.3%, AMD climbed 8.3%, Marvell advanced 8.2%; in the storage sector, Micron jumped 8.5%, SanDisk rose 9.6%, and Western Digital gained 6%. Markets with smaller AI trading exposures held up relatively better. Emmanuel Cau of Barclays said that given the policy gridlock, the current indiscriminate sell-off appears excessive relative to the likely policy outcomes, but the market still needs time to stabilize; if tail risks from oil prices fade, Europe could be a relative beneficiary.

Kevin Hassett, Director of the White House’s National Economic Council, stated that the rapid employment growth over the past three months is under review, and the AI bubble is indeed a cause for concern. Even as growth in the data center sector slows, the economy is still expected to post strong growth.

According to a report by The Information, TSMC (TSM.N) is considering producing 3D DRAM at the request of NVIDIA (NVDA.O).

Binance co-CEO He Yi stated in a post that the exchange’s latest zero-knowledge proof for its Proof of Reserve (PoR) is now ready, enabling users to independently verify whether their platform balances are backed by at least a 1:1 reserve. He Yi cautioned that a time gap exists between the completion of the reserve proof and users’ ability to verify it themselves, adding that the required time typically depends on asset size and is not controlled by Binance.

Nov 6 Update: #Bitcoin ETFs: 1D NetFlow: -4,832 $BTC(-$366.66M)?? 7D NetFlow: -19,343 $BTC(-$1.47B)?? #Ethereum ETFs: 1D NetFlow: -25,590 $ETH(-$57.31M)?? 7D NetFlow: -174,687 $ETH(-$391.22M)??