Karla Barker 
AI Stock Selloff Spreads to Crypto Markets
Artificial intelligence stocks faced heavy selling pressure on Friday, and that weakness quickly spread to cryptocurrency markets. Bitcoin dropped below the $90,000 level during early U.S. trading hours, falling about 2% from its overnight position around $92,500.
The selloff started with chipmaker Broadcom, which tumbled 10% despite reporting strong earnings. The problem was their outlook—it just didn’t meet the sky-high expectations investors had built up. When a company that big misses on guidance, it sends ripples through the entire tech sector.
And that’s exactly what happened. The Nasdaq index was down over 1% in the first hour of trading. Oracle had already slumped 10% on Thursday and fell another 3% on Friday. It seems investors are getting worried that the AI theme, which drove so much of this year’s stock market gains, might be losing steam.
Crypto Stocks Follow Tech Lower
Bitcoin miners, some of which have been trying to diversify into AI operations, showed similar reactions to Broadcom’s disappointment. Hut 8 fell more than 5%, while Iren and Riot dropped about 4%. Cipher and Iren were both down around 2% over the past day.
Other crypto-related stocks followed the Nasdaq lower too. Robinhood and MicroStrategy were both down nearly 2%. Stablecoin issuer Circle took a harder hit, falling more than 5%. Coinbase dropped slightly, but held up relatively better than some of the others.
There’s been a consistent pattern this week where bitcoin sets intraday lows during U.S. trading hours. That pattern has actually led to the filing of the proposed AfterDark Hours ETF, which is interesting timing given what’s happening.
Fed Uncertainty Adds to Market Pressure
Markets were already feeling pressure after Federal Reserve Chair Jerome Powell’s speech on Wednesday. He hinted at a possible pause in rate cuts for January, which shifted expectations. Now markets are pricing in only two rate cuts for 2026 instead of three.
Chicago Fed President Austan Goolsbee, who was against a December rate cut, said he expects more cuts in 2026 than the current median projection. That creates some confusion about where the Fed really stands.
Several other Fed members will speak today now that the blackout period following December’s meeting has ended. Traders will be watching closely for any guidance on whether officials agree with Powell about potentially holding rates steady in January.
The Bigger Picture
What’s happening here, I think, is a classic case of interconnected markets. When tech stocks sell off, especially AI-focused ones, it affects investor sentiment across risk assets. Bitcoin and crypto stocks often move with that sentiment, even if their fundamentals are different.
The AI theme has been so dominant this year that any sign of weakness gets amplified. Maybe investors are just taking profits after a big run, or perhaps there are genuine concerns about whether AI companies can deliver on their promises.
Either way, the correlation between tech stocks and crypto continues to be strong. When one sector stumbles, the other tends to feel it too. Today’s trading shows that relationship is still very much in place, even as both markets have matured over the years.