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Why is the crypto market bearish today? – TradingView News
Total cryptocurrency market capitalization remains stable at $2.35 trillion as of May 7, although Bitcoin BitcoinUSD rose slightly to $63,550. Lack of positive momentum led to modest drops of 0.5% to 2.5% in Ether 
Sociopolitical turmoil and concerns about AI’s impact on industry
Investors’ current unease stems from data indicating an 18% drop in Tesla electric vehicle sales in China in April compared with a year earlier, as the company faces stiff competition from domestic producers including BYD. Sales of new electric vehicles in China rose 33% year over year in April, with BYD leading 49% growth. Tesla shares fell 3% on May 7 as the market absorbed the news.
Billionaire investor Stanley Druckenmiller told CNBC that his company cut positions in Nvidia in March, believing the boom in the artificial intelligence (AI) market could be overdone in the short term. Druckenmiller, who now heads the Duquesne Family Office, believes further gains in the sector could be “four to five years from now.”
Such comments fueled speculation that the AI sector could be entering a bubble, negatively impacting the risk of assets, including cryptocurrencies. More uncertainty emerged after the Wall Street Journal reported that Apple is developing chips to run AI software in data centers, although no clear timeline has been set for their launch.
Apple has reportedly partnered with TSMC on the design and production of the chip, unlike Google’s AI efforts, which have invested in developing their own inference server chips to reduce dependence on other chip designers. Regardless of its impact on the AI market, this move shows that Apple is looking for new areas of growth after quarterly iPhone sales fell 4%.
Investor unease also arises from increasing global sociopolitical turmoil in the Middle East and Ukraine. Continued tension in the region creates fear and uncertainty that have a negative impact on the overall risk to assets.
Related: Why did Ethereum (ETH) price drop today?
SEC comments confirm negative stance on crypto industry
The cryptocurrency market has also faced setbacks, especially following US Securities and Exchange Commission (SEC) Chairman Gary Gensler’s appearance on CNBC. During his most recent interview, Gensler stated that most tokens “are securities under the law of the land as interpreted by the US Supreme Court.” In Gensler’s opinion, investors are not receiving the “required or necessary disclosures” before being offered these assets.
According to a court filing released on May 6, the SEC issued a Wells warning to popular trading platform Robinhood regarding its US-based crypto business. Other crypto companies have also recently been targeted by the Department of Justice and US regulators, including Samourai Wallet, Uniswap and Consensys.
Efforts to restrict industry in the US and companies that aim to serve the region have resulted in several ventures preventing US citizens from participating in airdrops, accessing decentralized finance front-ends, or participating in certain markets. However, regulators cannot stop flows into regulated assets, including spot Bitcoin exchange-traded funds (ETFs), so the overall impact of such FUD on crypto markets may be smaller than anticipated.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.