Nvidia's $5.5B Chip Ban Leads to Downturn in Bitcoin, XRP, and ADA

Key Takeaways:

Nvidia’s stock dropped 8% after the U.S. restricted its H20 chip sales to China, impacting both equities and cryptocurrencies.
Bitcoin fell to $83,600, dropping from its two-week peak of $86,440, according to CoinDesk data. XRP also fell over 2% to $2.08, while Cardano (ADA) dropped 4% to $0.61. The CoinDesk 20 Index saw a decline of over 2%.

The mood among investors turned negative late Tuesday as Nvidia’s shares fell sharply in after-hours trading due to a $5.5 billion charge resulting from the U.S.’s ban on its H20 chip exports to China.

Market Reaction:

Bitcoin’s value fell, indicating a correlation with Nvidia’s trading issues, as cryptocurrencies like XRP and ADA similarly experienced losses.
Investors are looking ahead to the upcoming U.S. retail sales report and a speech from Jerome Powell, Chairman of the Federal Reserve, for economic insights and forecasts.

Impact of Nvidia’s Sales Ban:

As Nvidia’s shares plummeted, it raised concerns across the market regarding potential recession implications tied to the ongoing trade war initiated by President Donald Trump. There is particular attention on Powell’s upcoming speech, as the market is eager for cues on interest rate adjustments in response to these economic pressures.

Early in the week, Governor Christopher Waller suggested the Fed might need to implement a series of “bad news” rate cuts if tariffs are reimposed, which could influence market stability amid rising trade tensions.