Prices for cryptocurrencies are down sharply on Oct. 22, falling alongside technology stocks as investors grow increasingly nervous about the artificial intelligence (A.I.) trade.
Bitcoin (BTC), the largest cryptocurrency by market capitalization, is down 3% on the day and trading at $81,700 U.S.
Ethereum (ETH), the second biggest digital asset, is also down 3% and trading at $2,400 U.S. Smaller cryptocurrencies such as Solana (SOL) and XRP (XRP) are down about 4%.
Crypto is selling off alongside technology stocks as the Nasdaq Composite index falls more than 500 points in early trading.
All three of the major U.S. stock indices are in the red on Oct. 22 amid renewed worries about the sustainability of the A.I. infrastructure buildout.
The catalyst for the latest downturn in risk assets appears to be financial results from technology heavy weights Meta Platforms (META) and Tesla (TSLA).
Each company’s print contained worrying signs that appear to have shaken investor confidence in the A.I. trade.
Meta Platforms raised its capital spending forecast for this year to $135 billion U.S. to $145 billion U.S. That’s up from previous guidance that called for $130 billion U.S. to $145 billion U.S.
Meta also said that its board of directors approved a new publicly listed, non-voting Class C common stock that will go into effect on January 19 of next year.
The new shares are intended to give Meta additional flexibility for capital raising as it funds its A.I. infrastructure buildout. However, the Class C stock has raised concerns among investors.
As for Tesla, its capital expenditures more than doubled in the latest quarter from a year earlier to $3.73 billion U.S. As a result, Tesla’s free cash flow plunged 62% to $1.53 billion U.S.
There are also questions being raised about plans for Tesla to merge with SpaceX (SPCX). The two publicly traded companies are run by Elon Musk.
In recent weeks, cryptocurrencies such as Bitcoin have moved in tandem with technology stocks, rising and falling with risk assets in the market.
