Stock Market Meltdown: Dow Drops 650 Points, Bitcoin Sinks to $65K as AI Disruption Fears Hammer Tech and Crypto

US stock markets took a sharp dive on Thursday. The Dow Jones Industrial Average lost over 650 points, or about 1.3%. The S&P 500 fell 1.6%, and the Nasdaq Composite dropped more than 2%. Tech stocks led the sell-off as fears grew that AI disruption could hit many industries hard.

Even safe-haven assets struggled. Gold futures sank 3%, and Bitcoin slid to around $65,000. Investors shifted to a risk-off mode, pulling money from high-growth areas like crypto and tech.

Why Did Markets Sink? AI Fears Spread Beyond Tech

The trigger was growing worry about AI disruption. At first, it hit software stocks. Now, it’s spreading to trucking, logistics, and real estate services. Investors fear AI tools will change business models in these sectors.

• Trucking stocks like C.H. Robinson (CHRW) and RXO tumbled 16% and 20% after new AI tools emerged.
• Real estate firms such as CBRE and JLL fell as high-fee services face AI threats.
• Wealth management stocks dropped earlier this week on AI tax strategy tools.

Big tech names also hurt. Cisco Systems (CSCO) plunged over 12% despite sales growth from AI demand. Its weak profit outlook scared investors. Apple (AAPL) dropped 5% on Siri upgrade delays. Nvidia (NVDA), Meta (META), Amazon (AMZN), and others lost 2% or more.

Bitcoin and Crypto Feel the Heat

Bitcoin (BTC-USD) mirrored the stock drop, falling to $65,000. This risk-off mood hit crypto hard. Gold also sank near $4,950 per ounce, down 3%, as traders sold to cover margin calls.

Crypto markets often follow stocks in volatile times. Strong US jobs data added pressure. January added 130,000 jobs, double expectations. This cuts odds of quick Fed rate cuts, hurting growth assets like Bitcoin.

Upcoming earnings from Coinbase (COIN) after market close could sway crypto sentiment. Watch for insights on trading volumes and AI-crypto ties.

Jobs Data and Inflation Loom Large

Thursday’s jobless claims rose to 227,000, above forecasts. This follows the hot jobs report. A strong labor market means sticky inflation and fewer rate cuts.

Friday’s Consumer Price Index (CPI) report is key. A soft reading could boost rate-cut hopes and lift Bitcoin. But resilient growth dims those bets.

AI Boom’s Hidden Costs: Power Prices Surge

AI data centers drive huge energy demand. Electricity prices rose 6.9% last year, double headline inflation. Goldman Sachs notes bottlenecks like transformer shortages and regulations.

Power markets in Texas, California, and the Midwest face the worst hikes. Lawmakers push back: A bipartisan bill aims to shield consumer bills from data center loads. New York eyes a construction pause.

For blockchain and crypto, this matters. Mining needs cheap power. High prices could shift operations or boost efficient Proof-of-Stake chains.

Oil Slumps Amid Demand Worries

Oil added to the gloom. Brent and WTI fell 1.8% below $68 and $63.50. IEA cut demand forecasts, predicting oversupply in 2026. Geopolitical risks linger, but markets bet on glut.

What’s Next for Bitcoin and Markets?

Short-term, watch CPI and earnings from Coinbase, Applied Materials, Rivian. AI fears may ease if reports show resilience.

Long-term, blockchain offers upside. AI disrupts old sectors, but crypto enables decentralized AI models, secure data, and token economies. Bitcoin remains a hedge against uncertainty.

Markets rebound from dips. Stay tuned as AI reshapes finance.

Key Takeaways

1. Tech-led sell-off on AI disruption fears.
2. Bitcoin at $65K, gold down amid risk-off.
3. Strong jobs data delays Fed cuts.
4. AI power demand spikes electricity costs.
5. CPI Friday could spark recovery.

Discuss this news on our Telegram Community. Subscribe to us on Google news and do follow us on Twitter @Blockmanity

Did you like the news you just read? Please leave a feedback to help us serve you better

Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.