Analysts believe Bitcoin’s recent decline is not directly connected to Nvidia’s troubles, pointing instead to investors reallocating funds toward Anthropic’s upcoming IPO and a broader selloff across risk-sensitive assets.

Bitcoin (BTC) fell to nearly $68,000 overnight, its lowest price since August, extending its losses to more than 20% since early October. A combination of market uncertainty and shifting investor sentiment has continued to weigh on the cryptocurrency.

The latest turbulence surrounding Nvidia, the world’s most valuable publicly traded company, has weakened the AI investment narrative. Persistent inflation and political uncertainty following the U.S. midterm elections have also contributed to pressure across financial markets. However, analysts suggest Anthropic’s highly anticipated IPO may be a more significant factor behind Bitcoin’s latest selloff.

Xapo Bank CEO Seamus Rocca said Bitcoin’s decline could be linked to Anthropic opening its IPO subscription books, which reportedly received six times more demand than the shares available. According to Rocca, investors are moving money out of liquid markets to secure allocations in what could become the largest public offering in history.

Rocca suggested that investors seeking exposure to Anthropic’s IPO, which aims to raise as much as $64.4 billion, may be selling Bitcoin and other liquid investments to free up capital. He compared the development with SpaceX’s IPO earlier this year, which reportedly caused a temporary liquidity drain from Bitcoin as investors redirected funds toward the offering.

He explained that major IPOs often attract investors chasing short-term returns, making liquid assets such as Bitcoin an easy source of funding when demand for share allocations rises sharply.

Technology Sector Weakness and Strategy Concerns Weigh on Bitcoin

Rocca also highlighted volatility in technology stock valuations following Jensen Huang’s unexpected departure from Nvidia, recent cybersecurity incidents, and the possibility of Strategy being excluded from MSCI global indexes as additional factors affecting market sentiment.

However, several analysts argue that Nvidia’s challenges are not directly responsible for Bitcoin’s price weakness. Instead, they believe the market is experiencing a broad reduction in risk exposure and leveraged positions.

Mark Connors, chief investment strategist at Risk Dimensions, dismissed a direct connection between Nvidia and Bitcoin. He pointed to declining gold prices as evidence of a wider deleveraging trend affecting the AI investment trade.

Chris Sullivan, co-portfolio manager at Hyperium Decimus, also questioned the relationship between Nvidia’s troubles and Bitcoin’s decline, arguing that the two developments lack a clear logical connection.

Sullivan identified rising bearish positions against Bitcoin as a more relevant factor, noting that short open interest has surpassed its August peak. He also cited significant outflows from BlackRock’s iShares Bitcoin Trust (IBIT), extreme fear among cryptocurrency investors, and the possibility of a 50-basis-point interest rate hike within the next 30 days.

The ongoing selloff has also affected precious metals, strengthening the argument that investors are broadly reducing exposure to riskier assets rather than reacting exclusively to cryptocurrency-related developments.

Sullivan described the simultaneous weakness in metals and crypto markets as unusual, noting that financial markets do not always follow conventional logic.

Jim Ferraioli, head of crypto research at the Schwab Center for Financial Research, also questioned whether Nvidia was the primary driver of Bitcoin’s decline, aside from its influence on overall risk sentiment.

Ferraioli pointed to MSCI’s potential removal of Strategy from its benchmark indexes as another possible source of selling pressure. The exclusion could force index-tracking funds to sell Strategy shares, affecting the stock of the largest corporate Bitcoin holder.

However, Ferraioli noted that Bitcoin’s sharp decline occurred around 11 p.m. Eastern Time, suggesting that neither the Nvidia developments nor the MSCI announcement necessarily served as the immediate catalyst.

Despite Bitcoin dropping below $70,000, Rocca argued that the cryptocurrency has remained relatively resilient given the volume of negative developments affecting global markets.

SpaceX IPO Provides a Potential Bitcoin Recovery Benchmark

Strive CEO Matt Cole sees similarities between Bitcoin’s current decline and its performance ahead of SpaceX’s $75 billion IPO in June.

According to Cole’s post on X, Bitcoin declined 19% during the 50 days leading up to SpaceX’s public listing. In comparison, the cryptocurrency has fallen 18% over the same period before Anthropic’s planned IPO.

Bitcoin continued to decline after SpaceX went public, eventually reaching a bottom 18 days later before recovering. By the 100th day following the listing, Bitcoin had risen 28% from its IPO-period price.

Cole suggested that if Bitcoin follows a similar trajectory after Anthropic’s IPO, the majority of its recent losses may already have occurred, potentially setting the stage for a sharp recovery over the coming months.

Based on the historical pattern, Cole estimated that Bitcoin could climb toward $90,000 by late February if the previous recovery trajectory repeats.

Nevertheless, the comparison has limitations. Bitcoin’s decline surrounding the SpaceX IPO also coincided with concerns about potential BTC sales by Michael Saylor’s Strategy, making it difficult to attribute the entire downturn to IPO-related liquidity movements.