Bitcoin dives below $69,000 as Nvidia turmoil and Fed fears trigger $1.47B wipeout

Bitcoin slid 7% over 24 hours, trading at $68,408 as of 12:10 a.m. ET Friday, according to The Block's bitcoin price page. That marks its weakest level since Aug. 20. Ether dropped 6% to $1,921, BNB shed 6.3% and XRP lost 3.5% as the pain spread across the board.

The damage showed up fast in leverage. Crypto liquidations hit $1.47 billion over the past day, hitting 175,299 traders, with longs accounting for $1.31 billion of that, per CoinGlass data. A staggering $798 million of it landed in just four hours, including $718.5 million in long positions.

Rick Maeda, head of markets at Laevitas, called it a leverage event. He said BTC had already lost $72,000 during the U.S. session, and once it broke $70,000 late morning in Asia, long positions clustered below that level were forced out quickly. More than $600 million got liquidated in four hours, he noted.

The trigger traces back to Nvidia. Jensen Huang resigned as CEO on Thursday morning after the company launched an investigation last weekend into his relationship with a suspected Chinese spy, following reports he had extramarital relationships with an Nvidia executive who reports directly to him and a second Nvidia employee. Maeda said traders trying to catch a reversal from the Nvidia-driven risk-off, combined with thin bids after this week's CPI, both fed the liquidations.

BTSE COO Jeff Mei told The Block that bitcoin also sank on assumptions the Fed raises rates in December to fight inflation. He said traders are hunting for signals of a potential 50-basis-point hike, which hinges on inflation and unemployment data, oil prices and Middle East geopolitics. If the Fed goes 50 basis points instead of the expected 25, Mei warned, crypto has more room to fall.

Not everyone reads it as bad news. Jeff Ko, chief analyst at ViaBTC, argued persistent inflation could actually sharpen bitcoin's appeal as an inflation hedge and boost the currency debasement trade longer term. He said markets will be watching the upcoming PCE in late November and, more importantly, the Dec. 9 FOMC dot plot, with an Iran de-escalation flagged as one of the quickest paths to cooling inflation.