Nvidia Wobbles on Jensen Huang Affair, Ouster Rumors; Bitcoin May Face Spillover

Nvidia drops more than 8% on Huang ouster speculation

Bitcoin falls more than 4% in three days

AI-stock jitters add to pressure as Strategy faces MSCI removal

Nvidia CEO Jensen Huang’s affair scandal has escalated into rumors of his departure, adding to uncertainty across financial markets. Nvidia shares rebounded in regular trading, but slumped in after-hours trading after reports said the board was discussing replacing him. The episode is also raising concern about another headwind for digital assets, which were already under pressure from high inflation and elevated interest rates.

On Nov. 11, Nvidia closed up 2.87% at $173.73 in New York trading. The gain partially recouped a 9.51% drop over the previous two sessions. After the close, however, the stock fell more than 8% in extended trading as reports about Huang’s future continued to surface.

Bitcoin also came under heavier pressure after Huang acknowledged the affair. On Binance’s USDT market, Bitcoin fell from a Nov. 7 close of $75,867.59, the day before his admission, to as low as $72,727.27 intraday on Nov. 10. That was a decline of more than 4% in three days. On Nov. 11, it trimmed part of the loss to trade around $73,674, but remained about 3% below the Nov. 7 close.

From independent probe to replacement talks, concern grows over a leadership vacuum

The Wall Street Journal reported on Nov. 11, citing sources, that Nvidia’s board was preparing to dismiss Huang. The board held a meeting that night to decide his future, the report said. The possibility of a CEO change emerged after Huang’s admission of the affair and the launch of an independent investigation.

On Nov. 8, Huang acknowledged the affair in an open letter to employees and apologized to his family and staff. Nvidia’s board then opened an independent investigation after reports said Huang had become a target of contact by a foreign intelligence agency. At the time, the board said it had no reason to believe national security or company secrets had been compromised and expressed confidence in Huang and the management team.

The episode has also made Wall Street more cautious. Baird downgraded Nvidia to neutral, citing uncertainty over next year’s data-center spending, the possibility of weaker AI demand and questions over whether Huang will remain in the role. Morgan Stanley kept its overweight rating on Nvidia but removed the stock from its top-picks list. “Huang’s leadership is very important to the company’s strategic direction,” Morgan Stanley wrote, adding that short-term uncertainty would persist.

Nvidia’s heavy reliance on its founder has sharpened succession concerns. Dan Ives, a technology-stock analyst, said the company has no clear succession plan and that Huang would be difficult to replace. Gil Luria, managing director at D.A. Davidson, said Nvidia could struggle if Huang steps down immediately without a succession plan in place. If legal or internal policy violations are confirmed, the board could move quickly, he added.

"AI-stock losses could trigger Bitcoin selling"

The crypto industry is watching whether instability at Nvidia will shake investor sentiment across the broader AI sector. Market participants say the episode could add pressure to digital assets, which were already weakening. Nvidia and Bitcoin are not directly linked in business terms, but anxiety around AI-related stocks could translate into selling pressure on Bitcoin.

The ties between the two markets have grown as major listed miners expand into AI computing. Bitcoin.com said crypto investors also need to track demand and investment flows in the AI industry as mining companies move into AI computing services.

During the recent selloff, the correlation between Bitcoin and equities also strengthened. Bitwise said that when selling intensified on Nov. 5, Bitcoin’s 30-day correlation with the S&P 500 and Nasdaq 100 rose to about 0.8. The firm added that weakness in AI stocks could keep short-term volatility elevated across risk assets.

Russell Thompson, chief investment officer at Hilbert Group, said losses in AI and semiconductor stocks could spill over into deleveraging and margin calls. When margin calls hit, investors typically sell non-core assets first from their portfolios, and Bitcoin often falls into that category. He added that if Bitcoin breaks below the key trend support level of $71,900, it risks falling to $65,000.

Inflation, rates and MSCI add to the pressure

Inflation and interest rates are also weighing on a rebound in Bitcoin. The U.S. consumer price index for October, released on Nov. 10, rose 0.4% from the previous month, above market expectations of 0.3%. Analysts at Bitget Wallet said the hotter-than-expected inflation reading could strengthen expectations for a December rate increase. Louis Huang, an analyst at Bitget, said rising Treasury yields and a stronger dollar could add to Bitcoin’s selling pressure.

The removal of Strategy, one of the best-known corporate Bitcoin holders, from a major equity index has also emerged as an overhang. MSCI, the global index provider, said on Nov. 11 in its latest review that Strategy would be removed from the MSCI USA Index. The change will take effect after the market close on Nov. 30.

Some investors worry that index-tracking outflows could weaken Strategy’s capacity to buy more Bitcoin. Blofin Research estimated that funds tracking MSCI indexes would have to sell about 13 million Strategy shares, worth about $1.6 billion. Because the company funds Bitcoin purchases through measures such as stock issuance, pressure on the share price could constrain additional buying.

Still, some analysts say the decision will have only a limited effect on Bitcoin’s price. Markus Thielen, founder of 10x Research, said the possibility of Strategy’s removal from the index had long been known and was already largely reflected in the stock. The spillover effect on Bitcoin itself would likely be limited, he said.

In the near term, whether Bitcoin can hold above $73,000 is emerging as a key test. Matt Mena, a senior crypto research strategist at 21Shares, said the token could slide to $69,000 if it falls below that level. If it holds $73,000 and the stock-market rebound continues, it could recover to $85,000 by year-end, he said.