A brutal, tech-driven sell-off hammered Asia-Pacific markets on Thursday. Japan's Nikkei 225 plummeted over 5%, dropping to 63,208 points in one of its worst sessions in recent memory. Taiwan's benchmark index fell more than 4%.
The sell-off, which followed a tech rout on Wall Street, was centered on semiconductor stocks. TSMC, the world's leading advanced chip manufacturer, saw its shares fall between 2% and 3.6% after mixed earnings. In Japan, memory chip maker Kioxia Holdings cratered 15%.
Geopolitical tensions between the US and Iran fueled the downturn. Rising oil prices from Middle East instability reignited inflation fears, posing a direct threat to Japan's energy-import-dependent economy.
The turmoil has significant implications for crypto. Many hedge funds holding semiconductor stocks also maintain crypto positions. To raise cash during margin calls or broad de-risking, they sell liquid assets like Bitcoin, which trades 24/7.
Crypto traders are watching the US semiconductor ETF as a leading indicator. If the Asian tech weakness spreads to another session on Wall Street, correlated selling pressure on Bitcoin and Ethereum is likely to increase.