An alarm signal for Bitcoin was sounded by Peter Schiff, in the wake of the sweeping victory of Democrats over Republicans in the US midterm elections. As the economist pointed out, investors are overlooking Bitcoin (BTC), focusing excessively on a «deflating artificial intelligence bubble».
It is highlighted that on Thursday (November 5, 2026), microchip manufacturers recorded their worst trading session since the market crash caused by the COVID-19 pandemic, with the iShares Semiconductor ETF plunging 12.15%.
Bitcoin also underwent a sharp correction, sliding below 76,000 dollars and touching its lowest level since September 16, as the broader selloff across technology stocks extended to other high-risk investment assets.
«The biggest difference between the two is that, while artificial intelligence has real value, Bitcoin has none», Schiff maintained.
The economist, who for years has leveled intense criticism at Bitcoin, urged its holders to sell «before all the air starts coming out of the bubble», characterizing the dominance of Democrats in the midterm elections across both chambers of Congress as «the final nail» for the cryptocurrency.
Bitcoin's post-election rally quickly reversed
Schiff argued that the trajectory of Bitcoin was inextricably linked to President Donald Trump, whom he described as the «Bitcoin president».
He has maintained that strengthened congressional oversight of the Trump administration could weaken the political support that contributed to the rise of Bitcoin.
«Whatever is bad for Trump is bad for Bitcoin too. Also, Republicans support Bitcoin, whereas Democrats do not», the economist stated.
«Even larger contributions will be required from big investors to buy off the Democrats, beyond those they have already paid to buy off the Republicans», he added.
The steep fall following initial gains
Immediately following the midterm elections, Bitcoin recorded strong gains, climbing from 77,000 dollars to just above 81,000 dollars.
Market observers, including the co-founder of American Bitcoin Corp., Eric Trump, argued that the rally reflected the new reality of a «divided government», with political uncertainty triggering, as he described it, a «flight to safety».
However, these gains evaporated on Thursday, amid a broader selloff in shares of the artificial intelligence sector.
For his part, the founder of SkyBridge Capital, Anthony Scaramucci, argued that the latest pullback offers investors who missed the previous upward run of Bitcoin a fresh «opportunity» to enter the market.
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