Bitcoin Holds $75K as AI Rules Panic Halts South Korea's KOSPI

Bitcoin (BTC) was trading near $75,733 on Friday, parked right on its 50-week simple moving average, according to TradingView data. The largest crypto had slid as much as 6.6% on Thursday as Wall Street bled through the session. The S&P 500 closed down 4.4% and the tech-heavy Nasdaq Composite dropped 5.5%.

Asia caught the falling knife Friday. South Korea's KOSPI Composite Index plunged more than 8% shortly after the open, triggering a circuit breaker that froze trading for 20 minutes. It clawed some ground back to finish 6% lower at 5,059.69 points — its weakest close since March 31.

Seoul moved fast. At an emergency meeting, deputy prime minister and finance minister Lee Hyoung-il rolled out measures aimed at curbing forced selling. Brokerages will be exempt for three months, starting Monday, from a rule requiring a 140% collateral ratio on margin loans, local media reported. Authorities said more steps are ready if volatility worsens. An unnamed government source told Chosun they recognize the expanding volatility with gravity, tying it to the U.S. midterm elections.

The trigger, analysts say, was fear of tighter AI rules after Democrats swept the House and Senate. Those worries piled onto existing doubts about the sector's capital spending. Market commentary service The Kobeissi Letter pointed to an X post from Democratic Rep. Yassamin Ansari calling for a pause on advanced AI development, but argued a full US ban is near-certain not to happen. Surrendering the global AI race to China, it said, won't happen.

The damage was lopsided. Kobeissi noted the S&P 500 fell only about 2.5% excluding tech, while the Philadelphia Semiconductor Index — tracking 30 chip companies — finished Thursday down 12.2%. Economist Mohamed El-Erian wrote in a Substack note that America's let-it-rip AI approach matches the technology's productivity potential and national security needs, but has fallen short on safety, diffusion and bringing society along. He said the backlash reflects genuine concerns, information failures and behavioral factors.

Cointelegraph has previously reported that Democrat midterm sweeps under Republican presidents have historically been followed by strong stock returns. Bitcoin's correlation with the S&P 500 has also turned more positive in recent months, meaning crypto traders now have plenty of reason to watch both Wall Street and Washington.