Silver, tech stocks, Bitcoin! Where on Wall Street is the most crowded? Where there’s a stampede, the chaos is the worst.

In every corner of Wall Street, the previous relentless obsession with hot assets like tech stocks, gold, and cryptocurrencies is gradually fading, replaced by a sudden and large-scale risk retreat.

On the surface, this cross-asset sell-off doesn’t have a single trigger—unlike last April when President Trump’s “Day of Liberation” trade war caused panic-driven market crashes. Instead, the current market resembles a “blunt knife cutting through” a series of negative news. These headlines have intensified collective anxiety over overvalued stocks—after all, many have long suspected the market was overheated—ultimately triggering synchronized investor withdrawals.

And the consequence of momentum strategies continuously unwinding is the complete wipeout of those “high beta” assets—where the most crowded areas on Wall Street are, the more brutal the stampedes…

Thursday’s market further confirmed this trend: the S&P 500 fell 1.2%, marking the third consecutive day of decline; by Thursday’s close, the S&P 500 had erased its gains for the year. The Nasdaq 100 also fell below its 100-day moving average, posting its most intense three-day drop since April last year.

After AI company Anthropic launched a new model focused on financial research, software stocks declined further, highlighting the competitive threat posed by new technologies. The S&P 500 Software and Services Index dropped 4.6%, marking its seventh straight day of decline.

After the market close on Thursday, Amazon’s stock plunged over 8% after its latest earnings report forecasted capital expenditures to increase by more than 50% this year, far exceeding analyst expectations. Market participants are increasingly worried about tech companies’ overinvestment in artificial intelligence.

Currently, the VIX index, known as the fear gauge for US stocks, has reached 23, the highest level since November 2025, and has remained above 20 for three days in a row.

Meanwhile, silver prices plummeted nearly 20% on Thursday, and during Friday’s Asian session, they briefly fell another approximately 10%. Currently, spot silver prices are around $64 per ounce, nearly halving from the record high of $121 set at the end of last month.

Bitcoin also suffered a sharp decline on Thursday, breaking below $65,000—its largest single-day drop since the FTX collapse, driven by unwinding leverage bets and overall market turmoil. Just a week ago, Bitcoin accelerated downward after falling below $80,000, and compared to the vibrant peak of $126,000 in early October last year, it has now lost nearly half its value.

“Investors are clearly shifting to defensive strategies,” said Brian Frank, President and Portfolio Manager of Frank Funds. “The current environment is more like shooting first and asking questions later.”

Recent market trends stand in stark contrast to the sentiment at the start of the year—when strategists predicted the longest consecutive rally in nearly two decades. These expectations were based on three main factors: the continued heat of the AI boom, the resilience of the economy exceeding expectations which would sustain corporate profits, and the Federal Reserve gradually cutting interest rates.

These outlooks remain largely unchanged, and recent solid earnings reports have confirmed this. But the market is also beginning to refocus on some growing risks:

• Companies that may be eliminated in the AI wave;
• Uncertainty over the Federal Reserve’s policy direction if Kevin Woor, nominated by Trump, replaces Powell as Fed Chair;
• Overvalued tech giants like gold, Bitcoin, and Alphabet, Google’s parent company—these valuations may be difficult to sustain in the long term.

On Thursday, Caixin reported that Goldman Sachs’ “high beta” or unconstrained momentum portfolio (GSPRHIMO) just experienced its worst day since 2022. Meanwhile, overnight market momentum shows no signs of recovery from the previous day’s sharp decline.

Similar momentum stagnation is also evident in other popular assets, such as Bitcoin. Last year, during most of the time when Trump’s victory sparked a speculative frenzy in cryptocurrencies, Bitcoin experienced a meteoric rise. But as investors withdrew funds, these tokens’ markets plunged significantly this month.

On Thursday, Bitcoin’s sell-off intensified as trading progressed, dragging down other cryptocurrencies, ETFs, and asset management firms like Strategy Inc. that hold large amounts of crypto. By the end of New York trading hours, Bitcoin had plummeted 13% to over $63,000, nearly halving its market cap from the peak reached four months ago.

“Market panic and uncertainty are evident,” said Chris Newhouse, Head of Business Development at Ergonia.

In fact, compared to other assets, the stock market’s decline remains relatively moderate, but pressure is spreading across the board, with nine out of eleven sectors in the S&P 500 retreating on Thursday. Besides concerns over companies being hurt by AI technology, investors are more worried about whether massive tech investments will ultimately pay off. The decline in Alphabet’s stock, despite revenue beating expectations, after announcing ambitious spending plans, exemplifies this.

Nomura Securities’ Charlie McElligott raised a noteworthy concern after Thursday’s close:

The equity options market is now beginning to price in some real fears—namely, the risk of a true “crash.” Implied volatility and actual volatility are starting to fluctuate wildly, and the volatility of volatility (vVol) indicates tail risks are being “bought.” Recently, turmoil caused by “AI disruption” in traditional weighted tech, growth, SaaS, and dividend blue-chip stocks has spread to private credit, business development companies (BDCs), and private equity (PE). These sectors hold large positions in such assets, with valuations at their highest levels in recent years.

Kim Forrest, Chief Investment Officer at Bokeh Capital Partners, noted that recent pullbacks reflect market concerns:

Overheated stocks and assets like gold need to adjust. “This is a reset,” she said. “Market momentum may have been overextended.”

(Source: Caixin)