Nvidia shares dropped nearly 3% in pre-market trading after China’s market regulator alleged the chipmaker violated anti-monopoly laws, sparking broader weakness across risk assets, including Bitcoin and AI-related tokens.
China Targets Nvidia Over Mellanox Deal
The State Administration for Market Regulation (SAMR) in China announced that Nvidia breached conditions tied to its 2020 acquisition of Mellanox Technologies, an Israeli networking firm. While officials did not provide full details, the regulator suggested the violations were linked to restrictions imposed as part of the conditional approval process.
The development marks a new regulatory challenge for Nvidia (NVDA), the world’s most valuable publicly traded company, which has been at the center of both the AI boom and U.S.–China tech competition.
Ripple Effect on Bitcoin and AI Tokens
Market jitters extended beyond equities. Bitcoin slipped more than 1.5% over the past two hours, dropping from an intraday high of $116,755 to $114,900 at press time.
Tokens tied to the artificial intelligence sector — including Internet Computer (ICP), Render (RNDR), Fetch.ai (FET), and The Graph (GRT) — also posted losses of more than 4.5% in the past 24 hours, reflecting Nvidia’s outsized influence on sentiment.
“Nvidia has become a bellwether for risk appetite, not just in equities but also in crypto markets,” said one digital asset strategist. “Given the strong historical correlation, any sharp moves in NVDA often spill over into Bitcoin and AI-linked tokens.”
Strong Correlation Between NVDA and BTC
Data highlights this relationship. According to Macroaxis, the three-month rolling correlation between Nvidia’s stock and BlackRock’s spot Bitcoin ETF stood at 0.76 as of last Friday — signaling a robust connection between the two assets. Both bottomed out together in late 2022 before embarking on a historic rally.
While the drop in Nvidia’s shares reflects a regulatory setback, analysts suggest the company’s long-term dominance in AI chips remains intact. For Bitcoin, the episode underscores its sensitivity to equity market shifts, especially as institutional adoption continues to tie crypto performance to traditional risk assets.
For now, investors will be watching whether further clarity from China’s regulators intensifies selling pressure, or if markets stabilize in the days ahead.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.