A sharp downturn in equity markets spilled into crypto late Tuesday after Nvidia revealed a massive $5.5 billion charge linked to a U.S. ban on chip exports to China. The announcement triggered a sharp sell-off in Nvidia shares and weighed heavily on risk assets, including Bitcoin, XRP, and ADA.
Nvidia’s Shock Sparks Market Jitters
Investor sentiment soured after-hours when Nvidia disclosed it would write down $5.5 billion in the first quarter. The charge follows a Trump-era export ban that blocks Nvidia’s H20 AI chip sales to China, a major blow to one of its most promising product lines.
The tech giant’s shares plummeted 8% to $89.10, dragging down futures tied to the Nasdaq index, which dropped over 1%. The timing also aligned with a wave of unusual NVDA put option activity, signalling that some investors had anticipated the downturn.
Crypto Follows Wall Street’s Lead
The crypto market wasn’t spared. Bitcoin (BTC) dropped to $83,600, retreating from a two-week high of $86,440 earlier in the day. XRP and Cardano’s ADA mirrored the fall, slipping over 2% to $2.08 and 4% to $0.61, respectively.
The CoinDesk 20 Index, which tracks major cryptocurrencies, fell over 2%, reflecting the broader risk-off sentiment. Tokens linked to artificial intelligence—often perceived as tied to Nvidia’s trajectory—were hit harder.
Eyes on Retail Data and Powell’s Speech
The next potential market catalyst is the U.S. retail sales report for March, due Wednesday. Analysts expect a 1.2% monthly rise, a significant jump from February’s 0.2% gain. A strong reading could help ease recession fears, but analysts warn it may be seen as outdated, especially amid the latest escalation in trade tensions.
Federal Reserve Chairman Jerome Powell is also set to speak at the Economic Club of Chicago on Wednesday. With economic uncertainty and geopolitical pressure mounting, markets are looking for any hint of an interest rate cut.
Trump’s Tariffs Stir Fed Speculation
Earlier this month, Donald Trump reintroduced sweeping tariffs on 180 nations—though most were temporarily suspended, except for China. The move has reignited recession concerns and sparked speculation that the Fed may cut rates sooner than expected.
Fed Governor Christopher Waller warned of “bad news” rate cuts if the tariffs are reinstated. Meanwhile, inflation breakevens have declined, hinting at a disinflationary effect from trade restrictions, possibly giving the Fed more room to ease policy.
