Nasdaq's Near-4% Drop and Bitcoin's Fall to $75,468 Expose Founders' Fragile Plans

By Olivia Hart

The Nasdaq Composite fell nearly 4% during morning trading on Nov. 5, one day after stocks and Bitcoin had rallied on the Democratic sweep of Congress. Bitcoin reversed with it: Bitcoin.com reported a Bitstamp low of $75,468 by 10:55 a.m. Eastern, down from above $81,000 the previous day.

The reversal makes a simple political explanation difficult. The election result had not changed overnight. What changed, according to the analysis, was investors reassessing what the result meant for businesses whose valuations depended on continued growth, access to financing and confidence in the future.

The lesson drawn for entrepreneurs is blunt: the first market reaction to an election makes a poor foundation for a business plan.

Why did the AI trade come under pressure?

Reuters reported concern that Democratic victories could bring closer scrutiny of data-center expansion. Chipmakers, data-center operators and their suppliers sold off as investors priced in slower development.

Note what was being punished: possibility, not policy. No rule had been written. Markets marked companies down because a project might face delays. Expectations changed valuations before any regulation changed operating plans.

For developers, even a temporary delay changes the economics. Equipment has to be financed, contracts carry obligations and interest accumulates before customers pay. A project can stay technologically promising while becoming unattractive at its original cost and timetable.

The weakness predated election night. A separate Reuters report described investors already questioning returns on enormous AI investments and the debt funding them. The political shift added an uncertainty to an existing debate; it did not create every flaw in the trade.

What did company earnings add?

Operating results carried their own weight. In its Nov. 4 earnings release, Qualcomm reported quarterly handset revenue of $5.137 billion, down 26% year over year, and warned of rising semiconductor input costs. Those pressures existed regardless of which party controlled Congress.

That is the uncomfortable part for founders selling ambitious growth stories: investors may still believe in the technology while demanding stronger evidence that expansion produces an acceptable return.

How did leverage accelerate the crypto selloff?

Bitcoin's decentralized design does not make its price independent of financial markets. People still buy and sell it with finite capital, shifting risk preferences and, sometimes, borrowed money.

When investors turn defensive, assets with very different purposes fall together. A trader cutting exposure need not abandon a long-term belief in Bitcoin to sell it; the immediate priority may be reducing losses or freeing cash.

Leverage makes that process faster. Coinbase International Exchange's trading rules, for example, provide for automatic liquidation when account equity falls below maintenance requirements. Closing leveraged positions adds pressure to an existing move — which helps explain how selling accelerates without fresh political news at every tick lower.

The forced closures were measurable. Bitcoin.com cited Coinglass figures showing roughly $839 million in liquidations over the preceding 24 hours, including approximately $741 million in bullish positions. Two caveats belong with that number: the window spans two trading days, and it measures positions liquidated, not cash withdrawn.

The simultaneous selloff is consistent with investors cutting risk, with leverage amplifying the pressure. It does not establish that the same investors sold both markets — or that the blue wave alone caused Bitcoin's decline.

What should founders actually test?

The recommended response is not prediction but scrutiny of the operating plan, starting with funding. If the next equity round takes six months longer, which commitments still have to be paid? If a loan becomes more expensive or an approval slows, is there enough cash to reach the next milestone?

Then demand. An AI company should show what customers pay for, how often they return, and whether delivery produces a sustainable margin. A crypto business should model lower asset prices, thinner liquidity and increased withdrawals.

Political assumptions deserve the same treatment. Put an expected approval or friendly administration in a scenario that can be tested — and identify how the business operates if those arrive late.

The exercise can yield specific decisions: stage a capital project, negotiate more flexible supplier terms, or prioritize a product customers already pay for.

What the reversal settles — and what it doesn't

The post-midterm reversal does not settle the long-term case for AI or digital assets. It shows how quickly enthusiasm disappears while spending obligations remain.

The blue wave was part of the context, but earnings, financing costs, infrastructure expectations and leveraged trading shaped the environment too. Assigning the entire move to one election result leaves founders with an incomplete explanation.

A company cannot control the next election or the next wave of selling. It can control how much of its future depends on a favorable outcome — and that, per the analysis, is where the work begins.