AI Frenzy Faces Doubts, Crypto Crashes Below $100K, Democrats Score Big Wins, and Markets Catch Their Breath

5th November 2025

It’s been a day of recalibration across markets and politics. Michael Burry made waves by shorting the AI boom, calling out Palantir and Nvidia just as tech stocks took a breather. Bitcoin slid below $100,000 for the first time since May, sparking $1.3 billion in liquidations. Meanwhile, Democrats scored sweeping wins in the first elections of Trump’s second term, with Zohran Mamdani’s historic New York mayoral victory leading the charge. From Wall Street to Washington, optimism is cooling but not collapsing. All this and more in Today’s Read It and Eat! 

Major News 

• Palantir Calls Michael Burry’s AI Short “Batshit Crazy”

Michael Burry, the famed investor behind The Big Short, is once again betting against the market this time, against the AI boom. His hedge fund recently disclosed more than $1 billion in put options against Palantir and Nvidia, two of the biggest beneficiaries of Wall Street’s AI enthusiasm. The move comes after both stocks have surged this year, Palantir climbing over 150% and Nvidia up nearly 50% making Burry’s bearish stance a bold contrarian call.

Palantir didn’t take the bet quietly. CEO Alex Karp lashed out during the company’s latest earnings call, labeling Burry’s trades “market manipulation” and urging him to short companies that “are not doing a noble task.” Karp, known for his blunt delivery, went even further, saying, “The idea that chips and ontology is what you want to short is batshit crazy.”His fiery defense came as Palantir’s stock fell almost 8%, despite the company reporting better-than-expected third-quarter results.

Burry, for his part, hasn’t offered much explanation. In a rare social media post, he hinted at concerns of an emerging “bubble” and shared a Bloomberg chart showing the circular flow of money in AI investments a subtle jab at what he may see as speculative excess. His actions suggest he’s positioning for a potential correction in the sector, even if the timing and structure of his trades remain unclear.

Still, Burry isn’t alone in his skepticism. Several Wall Street executives have cautioned that AI valuations look stretched, warning that the hype could give way to volatility in the coming quarters. Whether Burry’s latest short pays off or proves to be a misfire remains to be seen, but one thing’s certain: his bets are once again stirring up the market conversation. Morning Brew 

• Bitcoin Crashes Below $100K for the First Time Since May, as $1.3 Billion Gets Wiped Out

Bitcoin just broke through a psychological floor falling below $100,000 for the first time in six months and the ripple effects are hitting the entire crypto market. The leading digital currency dipped as low as $99,954 on Coinbase before clawing back slightly above $101,000, marking a 5% slide over the past 24 hours and a steep 20% decline since reaching its record high of over $126,000 in early October. Ethereum, XRP, Solana, and Dogecoin all suffered deeper daily losses, with Ethereum alone tumbling nearly 10% to below $3,300.

The broader selloff has sparked one of the largest liquidations in months, roughly $1.3 billion in crypto positions wiped out in just 24 hours, according to CoinGlass. Of that, more than $1.1 billion came from long positions, meaning traders who were betting that prices would continue to climb. Bitcoin accounted for nearly $470 million of those liquidations, followed by $377 million from Ethereum. “We are still facing the aftermath of crypto’s Black Friday,” said Brian Huang, co-founder and CEO of portfolio management firm Glider. “There’s a clear rotation into stablecoins, which have reached all-time highs in circulation.”

The correction comes after months of relentless gains that had some investors wondering if Bitcoin’s latest rally had run too hot. Last month, the market saw $19 billion in liquidations in a single day following President Trump’s renewed tariff threats against China, a reminder of how sensitive crypto remains to global macro shocks. This week’s slide has also been linked to the ongoing U.S. government shutdown, the longest in history, which has added uncertainty to markets already uneasy about liquidity conditions and fading expectations of another interest rate cut.

Still, not everyone sees the drop as a crisis. Vladislav Ginzburg, CEO of blockchain infrastructure firm OneSource, told Decrypt that the pullback looks more like profit-taking than panic. “I don’t see anything necessarily systemic,” he said. “A lot of major asset holders took profits above $115,000, and the price is finding its level now.” Ginzburg expects institutional treasury buyers to re-enter the market later this quarter potentially setting up Bitcoin for another push toward record highs once the dust settles. Decrypt

• Mamdani Wins New York Mayoral Election amidst other wins for Democrats 

Democrats scored sweeping victories on Tuesday in the first major elections of Donald Trump’s second term, injecting new energy into a party still searching for its post-2024 identity. In New York City, 34-year-old democratic socialist Zohran Mamdani clinched the mayor’s office after a viral, grassroots campaign that propelled him from little-known state lawmaker to national progressive star. Meanwhile, moderates Abigail Spanberger in Virginia and Mikie Sherrill in New Jersey both won their governor’s races with commanding margins, giving Democrats a rare dose of momentum heading into next year’s congressional contests.

The results offered an early snapshot of how voters are responding to Trump’s turbulent nine months back in office. While the contests played out largely in Democratic-leaning states, they revealed a party beginning to find its footing through a mix of pragmatism and bold economic messaging. In California, voters approved a redistricting plan favoring Democrats, a strategic boost in the battle for control of the U.S. House. Across the board, affordability and economic stability dominated campaign themes, helping drive the highest voter turnout in New York’s mayoral race since 1969.

Mamdani’s win, however, stands out as the most symbolic. He will become New York’s first Muslim mayor after defeating former Governor Andrew Cuomo, who ran as an independent and dismissed Mamdani’s left-wing proposals including rent freezes, free childcare, and free city buses as “dangerous.” Wall Street leaders have voiced unease about a democratic socialist running the global financial hub, while Republicans have already seized on Mamdani as a new emblem of the Democratic Party’s leftward shift. Trump, in a late-night social media post, blamed the GOP’s losses on his absence from the ballot and the ongoing government shutdown.

Still, Trump loomed large over the night’s results. Both Spanberger and Sherrill sought to tie their Republican rivals to the president’s most divisive policies, from mass deportation efforts to tariff disputes. “We sent a message to the world that in 2025 Virginia chose pragmatism over partisanship,” Spanberger told supporters. For many voters, frustration with Trump’s chaos and economic brinkmanship seemed to outweigh partisan loyalty. As one Virginia voter put it, “I’m not a Democrat, but I’m tired of Trump’s chaos. We need someone focused on people, not power.” Reuters

• Investors Urge Calm as AI Stocks Take a Breather

AI stocks are finally catching their breath after a dizzying climb and while the selloff has rattled markets, most investors say it’s no reason to panic just yet. Tech-heavy indexes across Asia and the U.S. slipped again on Wednesday, with Seoul and Tokyo’s bourses down about 5% from recent highs and Nasdaq futures dipping 0.2% after a sharp 2% drop on Tuesday.

The biggest casualties were the high-flying names that have driven the AI boom most notably Nvidia, which has surged from niche chipmaker to the world’s most valuable company.

“The selloff appears to be largely positioning-driven, with recent outperforming names taking the worst of the move,” said Jon Withaar, senior portfolio manager at Pictet Asset Management. There wasn’t an obvious spark for the downturn, though it started after investors reacted unexpectedly negatively to Palantir Technologies’ strong earnings. The stock slid nearly 8% on Tuesday and continued to drop in after-hours trading. Nvidia shares also lost almost 4%, extending a weeklong decline to about 7% below their recent peak, with related semiconductor and AI firms across Asia following suit.

Market watchers say the pullback looks more like profit-taking than panic. “It’s fairly blanket selling in the risk-leverage part of the market, which to us looks like short-term profit taking,” said Angus McGeoch, head of equities distribution for Asia at Barrenjoey in Hong Kong. Fund managers are likely locking in gains before year-end but remain ready to jump back in if the rally resumes. “Obviously they don’t want to give up a lot, given the year’s been kind,” McGeoch noted. Analysts like Saxo’s Charu Chanana also called the move “healthy,” describing it as a normal reset after months of relentless gains.

Still, a sense of unease lingers. Wall Street leaders, including Morgan Stanley’s Ted Pick and Goldman Sachs’ David Solomon, recently hinted that valuations in the AI sector may have run too far, too fast. South Korea’s stock exchange even issued a cautionary note on chipmaker SK Hynix routine, but enough to trigger a quick 6% slide. Yet for others, the dip looks like an opportunity rather than a warning. “I’ve been buying today,” said Matthew Haupt, lead portfolio manager at Wilson Asset Management. “I hope I’m right.” For now, it seems, the AI party isn’t over just pausing for a deep breath. Reuters 

Minor News

• Pizza Hut Faces Possible Sale After Years of Stalled Growth.  Morning Brew

  
  
  
  

• Airline Stocks Slip as Shutdown Threatens to Close U.S. Airspace. Reuters

  
  
  
  

• Google’s $32 Billion Wiz Deal Gets DOJ Green Light, CEO Confirms. Reuters

  
  
  
  

• The US government enters its longest shutdown in history. BBC

  
  
  
  

• Nvidia Backs India’s Deep Tech Push With $850 Million Alliance Commitment. Reuters 

  
  
  
  

• Shein Opens Its First Physical Store in Paris, Marking New Retail Push for the E-Commerce Giant. BBC 

• Apple to Launch First Budget Laptop Priced Well Below $1,000. Finance.Yahoo

•  IBM to Slash Thousands of Jobs as It Pivots Toward Software Expansion. Finance.Yahoo

• Former U.S. Vice President Dick Cheney, Architect of Iraq War, Dies at 84. Reuters