Why did the US stock market drop sharply after opening on Thursday? Wasn’t the midterm election a good thing? Why did Bitcoin drop as well??

😂 I started typing last night, and within less than an hour, there was a big drop. Bitcoin has already fallen more than 6%. In this case, the original sin is likely due to the US stock market. Indeed, Nvidia, AMD, and data center-related stocks are all declining, which means tech stocks and AI are all down.

The main reason is that the Democrats won. Wait a minute, wasn't it said that the Democrats winning is good news? Just yesterday, you said it was good news; how is it bad news today? Why is it all just your opinion on good and bad!!

Don’t start yet; the logic is like this.

Yesterday, the Democrats won, controlling Congress, especially Senate Democratic leader Schumer, who indicated a desire to end the war between the US and Iran. This good news indeed drove the market up, even Bitcoin:native. That’s correct.

But as someone mentioned yesterday, isn’t that good news? Why are tech stocks falling? The reasons for the decline in tech stocks yesterday and today are the same! The main reason is the increased uncertainty in data center construction.

In fact, the Democrats won in Texas, Georgia, and other areas where data center construction is concentrated. Some locals have previously opposed the expansion of data centers, fearing increases in electricity, water, and utility costs. Investors are concerned that some projects may face stricter approvals or be halted in the future. If data centers are built slowly, the growth of orders for chips, servers, and computing power suppliers may also be affected.

In simpler terms, the Democrats are not that aggressive, so in areas where the Democrats mainly won, they might reduce support for AI data centers for electoral votes. Moreover, the market is currently worried that the expansion of AI will lead to increased capital expenditures, which has resulted in tech stock investors beginning to worry, leading to sell-offs.

This is the first main reason. Secondly, oil prices have started to rise again. The main reason is that yesterday the market was driven by emotions, and today those emotions have settled, which is why I cleared my short positions as soon as I saw oil prices rebound in the morning. Without considering the funding rate, it was a slight profit; even factoring in the funding rate, it was still a loss. However, I think as long as Iran gives clear signals, I will just short it.

In the last round in July, I thought it could drop further, and I ended up turning an 80% profit into more than 100% loss, along with a headache from the funding rate, so this time I was more decisive.

As for Bitcoin:native, I made a wrong judgment. Although I knew AI would drop and oil prices were rising, it was already like that during the day. But during the day, BTC didn’t show much movement, so I thought there wasn’t much issue with BTC. As a result, I bought in at the bottom, and this happened. However, I believe buying in now still shouldn't be a big issue; while I continue to short oil prices, the BTC price should come back.

But for AI and semiconductors, my advice to my friends is not to rush to buy the dip.

One @Gate, trading more markets

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