Live updates: Crypto gives up some ground as AI selloff picks up steam

After days of relentless selling, the neoclouds — former bitcoin miners turned data center providers to the fast-growing AI sector — bounced hard on Thursday, many closing the day in the green after early sharp declines.

The selling has resumed on Friday, though, with CoreWeave (CRWV) lower by 8% and extending its weekly decline to more than 20%.

Hut 8, IREN, CleanSpark, Keel Infrastructure, and Cipher Mining are all down roughly 6%.

In a note on Friday, Goldman Sachs pointed out that the widening in high-yield bond spreads is an AI story: Non-AI-related spreads were barely higher this week, while AI-related spreads widened by 25 basis points.

“We view AI-related corporate bonds, from either neoclouds or firms with significant frontier lab exposure, as being at the epicenter of the funding cost debate,” said the bank’s Amanda Lynam.

The tech sector came back from the brink on Thursday, but selling has resumed in U.S. trading on Friday morning.

The Nasdaq is slumping 0.7% while the less-AI-focused S&P 500 is flat and the DJIA is rising 0.7%.

Micron, Intel, AMD, Dell, SanDisk, and KLA Tencor are among the names down 3%-5%.

Declines among the Mag 7 are more subdued, and Tesla is even rising slightly after its flying-car demonstration last night.

Bitcoin is trading quietly near $82,000, up 2% from 24 hours ago.

Led by Michael Saylor, the company announced weeks ago its plan to switch to a daily dividend (from monthly) for its high-yielding preferred stock STRC.

The change is subject to a shareholder vote, which is underway, and the results will be known on Oct. 28.

Today’s announcement is thus conditional on the vote being in favor of the move to daily payments.

While strongly rebounding from its panicky lows of early summer, STRC continues to trade just below par value (yesterday’s close was $99.53), leaving Saylor and team unable to raise bitcoin-buying capital by issuing more shares.

The latest inflation-driven crypto selloff is a short-term reaction rather than a sign of deeper trouble, according to Catherine Chen, Binance’s head of institutional.

“The CPI-driven selloff is a sentiment shock, not a structural break,” Chen said, referring to the Consumer Price Index, a measure of U.S. inflation.

Chen expects inflation to peak around October, with clearer signs of cooling potentially emerging in March 2027. Lower energy prices and easing inflation could eventually help crypto markets recover, she said.

“A difficult trading day does not determine the outlook for the next several months,” Chen added. “The window for relief may already be approaching.”

Bitcoin climbed back above $82,000 on Friday, a day after a brief drop under $80,000, as ZEC led a broad crypto bounce with an 11% jump to about $1,230 — even as investors pulled money from the token’s only U.S. ETF.

SOL and ether each gained more than 3%, to about $106 and $2,450, and DOGE and XRP added between 2% and 3%. BNB, HYPE and TRX rose about 1%, and bitcoin was up nearly 1%, according to CoinDesk data.

The bounce hasn’t reached the ETFs. The U.S. spot ZEC fund lost about $15 million on Thursday, its fifth outflow this month, according to SoSoValue data. Ether funds shed about $60 million, and SOL funds lost nearly $10 million, their ninth straight day of withdrawals. XRP funds saw a small outflow.

Bitcoin ETFs drew a net $5 million, a thin inflow after Wednesday’s $261 million exit.

A second straight day of bitcoin ETF inflows would be the first sign the bounce from $80,000 has buyers behind it.