China’s AI Bubble Bursts With $480 Billion Wiped Out: Is the US Next, and Is Bitcoin Exposed?

China’s AI bubble has burst: the STAR50 index of Chinese AI and chip leaders has lost about 40% in under four months, erasing roughly $480 billion. Reuters’ analysis showed on Monday, October 26, how stretched valuations and Western equipment bans broke the rally. The selling didn’t stop there. On Tuesday, Cambricon, China’s answer to Nvidia, fell another 5.7%. The damage has spread across Asia, and U.S. chip stocks are already 24% below their June high. So is America’s AI trade next, and what would that mean for Bitcoin and AI crypto tokens? The AI bubble in China has officially bursted. The burst wiped out $480 BILLION in value and has affected all of the Chinese market. pic.twitter.com/LV1lKcnRGD — ToonHive (@ToonHive) October 27, 2026 DISCOVER: Best Meme Coins to Buy in 2026 China AI Bubble Burst: What Happened? A rally that ran far ahead of earnings. At its peak, the STAR50 traded near 250 times trailing earnings; even after the crash, it sits around 100 times, against roughly 30 for the Nasdaq 100. The individual names tell the story. Robot maker Unitree, whose IPO retail buyers oversubscribed 8,000 times, has halved since its August debut. GPU makers MetaX and Moore Threads ...