Trump-linked tokens and AI data-center shares fall after Democratic sweep

Democrats' midterm election sweep unsettled politically exposed digital-asset investments, including Trump-linked cryptocurrencies and Texas data-center projects supporting former Bitcoin mining companies' valuations. CoinGecko data showed that WLFI, the token issued by Trump-co-founded World Liberty Financial, lost about 7% over the last 24 hours. CoinGecko data showed Trump's namesake memecoin down about 17% over the same period. Trump Media & Technology Group Corp. shares fell as much as 17% and reached a record low. DJTU, an exchange-traded fund offering leveraged exposure to Trump Media, dropped 32%.

Noelle Acheson, who writes the Crypto is Macro Now newsletter, attributed the declines to diminished prestige and likely future investigations or prosecutions. Acheson said mining shares were falling because expectations for data-center construction had changed. Fight Fight Fight, the issuer of the Trump memecoin, did not immediately respond to a request for comment. World Liberty Financial declined to discuss the token's price decline.

World Liberty Financial spokesman David Wachsman said the company had followed all applicable US laws and regulations since the company began operating. Wachsman said potential congressional targeting of a compliant company would be baseless and troubling. Wachsman said World Liberty Financial had worked to broaden access to the US dollar while numerous problems facing Americans required attention.

Investors reconsidered plans to convert Bitcoin mining facilities into AI campuses. Texas elected a governor who had opposed unrestricted data-center development, threatening an important source of future computing capacity. The Democratic victories are expected to delay data-center construction while developers remain burdened by high financing costs. Galaxy Digital Inc., led by Michael Novogratz, lost nearly 14%. Hut 8 Corp. shares fell nearly 23%. MARA Holdings Inc. declined about 7%. Cipher Digital, Core Scientific and IREN each fell at least 10%.

Bitwise Asset Management chief investment officer Matthew Hougan warned that slower construction could put substantial pressure on AI-linked neoclouds. Hougan said financing costs would accumulate while revenue was delayed. Companies with major Texas sites were among those suffering the largest declines. Research firm SemiAnalysis estimates that Texas represents nearly 30% of US data-center capacity scheduled to begin operating in 2028, far more than any other state.

Clear Street managing director of disruptive technology equity research Brian Dobson said the change in Texas political control could bring more data-center regulation. Dobson said such regulation would favor established companies with strong records of responsible corporate conduct. Gina Hinojosa defeated Greg Abbott to become the first Democrat elected Texas governor in more than 30 years. Hinojosa is likely to take a stricter approach to data centers. Hinojosa's campaign platform called for a moratorium in the near term.

However, LO:TECH head of research Adam McCarthy said the selloff appeared excessive despite the Trump administration's strong support for AI. McCarthy argued that Bitcoin mining companies were now better positioned because the companies had already built infrastructure and had been converting that infrastructure. McCarthy said stricter Democratic limits on AI construction could potentially increase the value of existing infrastructure.