Trump-linked crypto tokens and AI data-center stocks fall after Democratic midterm victories
Tokens tied to Donald Trump and shares of companies linked to former Bitcoin miners dropped sharply following the Democrats' midterm sweep, as investors reassess regulatory and financing risks.
Tokens associated with Donald Trump experienced notable declines after the Democrats secured a sweeping victory in the recent midterm elections. WLFI tokens issued by World Liberty Financial fell about 6% in the past 24 hours, while the Trump-named memecoin dropped roughly 19%, according to CoinGecko data. Shares of Trump Media & Technology Group Corp. slid 25%, and the leveraged exchange-traded fund DJTU that tracks the company fell nearly 50%.
“It’s a reflection of both the drop in cachet and the likely investigations/prosecutions in the pipeline,” said Noelle Acheson, writer of the Crypto is Macro Now newsletter.
World Liberty Financial did not comment on the price movement, and the issuer of the Trump memecoin, Fight Fight Fight, did not respond to a request for comment. A company spokesperson, David Wachsman, said the firm has complied with all applicable U.S. laws and regulations and expressed concern about potential congressional targeting.
The sell-off extended to firms that had converted Bitcoin mining facilities into AI data-center campuses. Shares of Galaxy Digital Inc., led by Michael Novogratz, fell nearly 17%; Hut 8 Corp. dropped 23%; and MARA Holdings Inc. slipped about 4%. Cipher Digital, Core Scientific and IREN each fell at least 10%.
“Any slowdown in the buildout could put significant stress on AI-linked neoclouds, as financing costs will mount even as revenues are pushed back,” said Matthew Hougan, chief investment officer at Bitwise Asset Management.
In Texas, the election of Governor Gina Hinojosa, the first Democrat to hold the office in more than three decades, is expected to bring a tougher stance on unrestricted data-center development, potentially adding regulatory hurdles. Texas accounts for nearly 30% of U.S. data-center capacity slated to come online by 2028, according to research firm SemiAnalysis.
“The change of political control in Texas could yield additional data center regulations,” said Brian Dobson, managing director of disruptive technology equity research at Clear Street, adding that such rules would likely favor established incumbents.
Some analysts argued the market reaction might be excessive.
“Since the Trump admin has been so pro-AI, however, the sell-off seems like an overreaction because if anything these Bitcoin mining firms are now even better positioned,” said Adam McCarthy, head of research at LO:TECH. “They already have the infrastructure built and have been repurposing it, so stricter AI policies could make existing infrastructure more valuable.”