Wall Street Sell-Off Hits Bitcoin as Morgan Stanley Advances Tokenization

The crypto market came under heavy pressure this week as a sharp sell-off on Wall Street pushed Bitcoin down to around $75,000. The Nasdaq 100 suffered its worst session since March 2020, with AI and semiconductor stocks leading the decline.

Meanwhile, Morgan Stanley took another step into blockchain-based finance, becoming one of the first major banks to tokenize U.S. stocks and Treasury securities through DTCC's newly launched service.

Elsewhere, Democrats are preparing to revisit the CLARITY Act after their midterm election victories, with proposals that could give the SEC greater oversight of crypto markets and introduce tougher ethics restrictions for government officials.

1. Bitcoin falls to $75,000 amid Wall Street sell-off

Bitcoin dropped roughly 6% to $75,000 on Thursday as a sharp sell-off in U.S. technology stocks triggered widespread crypto liquidations. The Nasdaq 100 plunged more than 6%, its worst day since March 2020, while the S&P 500 fell about 4.4%.

AI-linked stocks suffered particularly heavy losses, with Nvidia dropping 9.3% and the Philadelphia Semiconductor Index falling 12.3%. Investors are increasingly concerned that Democratic election victories could slow AI data center development, adding to existing questions about the sustainability of massive AI spending.

2. Morgan Stanley tokenizes U.S. stocks through DTCC

Morgan Stanley became one of the first major banks to tokenize U.S. stocks and Treasury securities using DTCC's new Tokenization Service. The platform allows approved institutions to create blockchain-based versions of securities while preserving their ownership rights and investor protections.

Bar chart showing top 10 incidents in Sep 2026.

The launch marks another step toward integrating blockchain technology with traditional financial markets. Morgan Stanley is also developing a separate platform for trading tokenized stocks, scheduled to launch in the first quarter of 2027. Other major institutions, including JPMorgan, Citi, and Fidelity, have also signed agreements to access DTCC's service.

3. Democrats seek stronger SEC powers in revised CLARITY Act

House Democrats are reportedly preparing a new version of the CLARITY Act following their midterm election victories. The proposal could give the SEC greater authority over crypto markets than the CFTC and introduce stricter ethics rules targeting crypto business activities by senior government officials and their families.

The legislation could reach the House floor after the new Congress convenes in January 2027. However, its prospects remain uncertain. TD Cowen analyst Jaret Seiberg expects political tensions surrounding Trump's crypto ventures to prevent the CLARITY Act from passing for at least two years.