Bitcoin (BTC) fell as low as $71,200 on November 12, its lowest level in almost 12 weeks. The market reacted to Jensen Huang's sudden resignation from Nvidia and to uncertainty over possible selling after MSCI decided to remove Strategy from its indexes. Gemini also reported quarterly results and sold its European operations, and Ethlabs put forward a new proposal for Ethereum.
Huang resigns from Nvidia as Bitcoin falls to $71,200
Jensen Huang resigned on November 12 as CEO, chairman and board member of Nvidia, effective immediately. Chief Financial Officer Colette Kress, who has been with the company since 2013, became interim CEO and remains CFO until a permanent successor is found. For us the open question is who can fill the founder's seat, and we have no view on which name will be chosen.
The resignation followed a week of revelations. Nvidia opened an investigation the weekend before, after reports that Huang was a "target of a foreign intelligence operation" because of an alleged relationship with a Chinese spy. On November 11, the New York Times wrote about an alleged relationship with a woman who reports directly to him. Hours after the resignation, Reuters, citing two sources, reported a third alleged relationship, with a second Nvidia employee who was not named. The first two involve Alice Huang, whom US agencies suspect of working for Chinese intelligence, and Kimberly Powell, Nvidia's vice president of healthcare. Attorney General Todd Blanche said the Justice Department has not determined whether Alice Huang is a spy and that the FBI is investigating the claims. Beijing has denied them. All of this remains alleged and has not been proven.
Nvidia shares opened 12% lower, and the loss later passed 13%, with the price at $151. Investor Haseeb Qureshi wrote on X that when you find two ants in the kitchen, the best estimate of their number is not two. Donald Trump suggested former Apple CEO Tim Cook for the job on Truth Social. Coinbase CEO Brian Armstrong told CNBC he is saddened by the development, and Binance's Changpeng Zhao called it a mistake for Nvidia to let Huang resign. We think it is possible Huang wanted to step away from the wheel to get the spotlight off himself, since new details kept surfacing while people were digging.
In the market, Bitcoin was down 3.4% at $71,600 when The Block published. Ethereum (ETH), Solana (SOL) and XRP fell more than 3.5% over 24 hours. According to CoinGlass, more than $750 million in positions were liquidated, of which over $634 million were longs. Long liquidations push the price down, and that is what happened. Wintermute's Jasper De Maere said the firm remains cautious as Bitcoin tests $73,000, with no sign of large buyers. In his view, without such buyers, big moves need ETF flows to support them. Nvidia's perpetual futures on Hyperliquid traded $2.34 billion in volume over 24 hours.
MSCI removes Strategy from its indexes on November 30
MSCI confirmed in the final list of its November review that Strategy will be deleted from its indexes, effective after the market close on November 30. Japan's Metaplanet and Upexi are also on the deletion list, while Sharplink, an ETH treasury company, is on a watchlist. Strategy shares fell 1.65% after the close on November 11.
The removal could push funds that track these indexes into selling shares. JPMorgan estimated in October that the exit could trigger about $2.8 billion in selling. Strategy had opposed the proposal and argued in its consultation response that MSCI-linked funds hold about 13 million of its shares, or 3.1% of its core shares and less than one day of trading volume. Wintermute spoke of a risk of passive selling without estimating its size. In our view, Strategy will not easily find money to buy Bitcoin or its own shares in this period, and that matters for the market.
Gemini: trading volume down 73% and UK and European business sold
Gemini's third-quarter revenue was $40.9 million, down 19% from $50.6 million a year earlier and 10% from the second quarter. Trading volume fell 73% year over year to $4.5 billion from $16.4 billion, though it rose 18% from the previous quarter. Exchange revenue dropped 47% to $13.4 million. Net loss narrowed to $58.6 million from nearly $160 million a year ago, as operating expenses fell 30% to about $120 million. Assets on the platform rose to $13.4 billion from $8.4 billion in the second quarter, and prediction markets brought in $800,000, up 52% on the quarter. The stock (GEMI) gained 6.5% after the close to $2.79 and is still about 75% lower than at the start of the year.
CoinDesk reported on November 12 that Gemini sold its UK and European operations to Singapore-based stablecoin payments company KAST for less than $10 million. The price comes from a source familiar with the matter, and Gemini declined to comment. The company had announced on February 5 that it would close operations in the UK, the EU and Australia. There is no official statement on the deal, so we read it with caution.
Ethlabs: making Ethereum quantum-safe by 2027
The Ethlabs research team withdrew its proposal for faster blocks in the 2027 Hegotá upgrade. In a post on the Ethereum Magicians forum on November 11, it urged core developers to make quantum-computer security the top priority, ahead of the current 2028 target. The proposal is not part of Ethereum's roadmap. In September, the Ethereum Foundation's protocol team had set a target of December 2029, which has since moved to 2028.
Ethlabs proposes building Hegotá around Frame Transactions (EIP-8141), which allow signatures that resist quantum attacks, and delaying FOCIL. The reasoning is that a sufficiently powerful quantum computer could in theory derive the private key from a wallet's public key. The Ethereum Foundation's quantum research team says such a machine is not imminent, but replacing the cryptography in wallets, applications and validators takes years. Ethlabs also cites the risk from automated bug finding with AI. In our view, the proposal asks everyone in the ecosystem to set aside whatever else they are doing and work only on this. Code alone will not protect existing accounts, since wallets will need an update and holders will have to change their signing method.
In brief
Hawley and data centers: Republican Senator Josh Hawley called on November 11 for a national moratorium on new data centers, without having filed detailed legislation. On November 9, the Senate voted 73-25 to advance debate on a bill that speeds up approvals for energy projects. In the episode we noted that markets do not view a freeze on AI buildout favorably, and that their attention is also on the PPI release on November 13.
The market
When the episode was written, Bitcoin was at $68,000, holding for now a support level from previous weeks.