Bitcoin plunges to $68,000 as Anthropic IPO frenzy adds to market jitters
Bitcoin fell to $68,000 overnight, its lowest price since August, extending a slide of more than 20% since early October amid market shocks.
Bitcoin BTC $68,817.63 sank to $68,000 overnight, its lowest price since August, extending a slide of more than 20% since early October amid a string of market shocks that are weighing on the largest cryptocurrency.
Recent market turmoil stemming from the scandal at Nvidia, the world's most valuable stock, has weighed on the AI trade. Meanwhile, stubborn inflation and political uncertainties following the U.S. midterm election have pressured the broader market.
However, there is another event that may be playing a bigger role in the selloff at the moment: Anthropic's upcoming red-hot stock market debut.
Anthropic IPO pulls capital
In my view, the latest dip can be attributed to the opening of Anthropic's subscription books — which received six times more orders than shares available — pulling capital out of liquid markets to chase what is set to become the largest public listing in history, by a wide margin.
In my view, the latest dip can be attributed to the opening of Anthropic's subscription books — which received six times more orders than shares available — pulling capital out of liquid markets to chase what is set to become the largest public listing in history, by a wide margin.
Investors scrambling for an allocation in the AI company's IPO, which is looking to raise as much as $64.4 billion, may be selling bitcoin and other liquid assets to free up cash, according to Rocca. He compared the rush for Anthropic shares to the SpaceX IPO earlier this year, which he said temporarily drained liquidity from bitcoin as investors moved money into the offering.
When an IPO of this scale comes to market, the lure of a quick return is strong, and liquid assets like bitcoin are often the first source of funding when investors scramble for allocations.
When an IPO of this scale comes to market, the lure of a quick return is strong, and liquid assets like bitcoin are often the first source of funding when investors scramble for allocations.
Tech stocks add pressure
Rocca also cited swings in tech valuations following Jensen Huang's sudden departure from Nvidia, recent cybersecurity incidents and the prospect of Strategy's removal from MSCI global indexes as factors weighing on sentiment.
But some analysts see no direct reason for Nvidia's troubles to drag down bitcoin. Instead, they point to a broader rush to cut risk across markets.
Chris Sullivan, co-portfolio manager at Hyperium Decimus, agreed. Sullivan instead pointed to rising bets against bitcoin, with short open interest exceeding the August peak, alongside large outflows from BlackRock's iShares Bitcoin Trust (IBIT).
The selloff has also hit the metals market alongside crypto, adding to the view among some that investors are dumping riskier assets across the board rather than reacting to bitcoin-specific news.
SpaceX offers recovery roadmap
Matt Cole, CEO of Strive, sees similarities between bitcoin's recent decline and its performance ahead of SpaceX's $75 billion IPO in June. Bitcoin fell 19% in the 50 days before SpaceX went public, compared with an 18% drop over the same period ahead of Anthropic's planned listing, Cole said.
Following the SpaceX IPO, bitcoin fell further, hitting a low 18 days later before staging a recovery. By day 100, it was up 28% from its listing price.
If Anthropic follows the same pattern, most of the drawdown is behind us, and it could reverse quickly over the next couple of months. A repeat of that pattern would put bitcoin near $90,000 by late February, according to Cole.
But there are reasons to be cautious about the comparison. Bitcoin's decline around the SpaceX IPO also coincided with concerns about bitcoin sales from Michael Saylor's Strategy, making it hard to pin the drop solely on the IPO.
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