Live Updates: Bitcoin Falls Below $81,000 as AI Sell-Off Deepens

September inflation came in higher than forecast and the sell-off in AI stocks gathered pace, pushing Bitcoin back to its lowest level of the past week.

CEO Paul Prager tweeted earlier this afternoon, “A brutal couple of days in the AI ​​infrastructure sector, and TeraWulf WULF $12.61 · Market Close was no exception.

After speaking to a group of investors organized by Morgan Stanley yesterday, Prager summarized some of the issues and his answers.

Among them were questions about the effect of high interest rates.

"Our customers are investing billions of dollars in computing to generate significant economic returns," says Prager. "The cost of delaying this capacity could far exceed the incremental cost of financing it today."

"That's why financing costs are central to our lease negotiations and, in cases where it's under contract, the tenant... Higher rates are important. But time value is also important. Our job is to protect the economy."

"At Mariner Lake, we are advancing CB4 and CB5 toward planned Q4 and Q1 delivery. And our construction costs remain well within guidance. We are currently tracking about $9 million per megawatt of critical IT at Mariner Lake, within our $8-10 million guidance range."

WULF is 9.2% higher today, but is still down 9% over the past five days.

It wasn't until late August that new Federal Reserve Chairman Kevin Warsh surprised the markets with his hawkish Jackson Hole speech and raised interest rates a few weeks later.

The 10-year U.S. Treasury yield was around 4.65 percent at the time of Warsh's speech, rising to 5.30 percent by early October.

The Federal Reserve chairman is speaking again tonight (11:30 PM ET) and yields have fallen over the past two days despite two very worrisome inflation reports.

Considering the recent downturns in the stock market, it is possible that Varsh will continue this trend and refrain from bellicose rhetoric. However, thanks in part to those two weak inflation reports, Varsh appears to be reiterating his hawkish stance, preparing markets for multiple interest rate hikes in the coming months.

"Warsh has no choice tonight, he has to look even more combative than Jackson Hole," said one trader. "Fresh hot CPI and PPI, anything soft is read as surrender."

Nvidia NVDA $217.23 · Closed market need not leave CoreWeave (CRWV) behind, said Nvidia CEO Jensen Huang, speaking at an event in Sweden.

He added that CoreWeave's capital cost is "actually going down" and the power is improving every day.

Of course, Nvidia has a major stake in CoreWeave and invested $2 billion in NeoCloud common stock earlier this year. CoreWeave data centers run almost entirely on Nvidia chips and hardware.

CRWV pared its losses to 2.9% on the day, but is down nearly 50% over the past six months.

The recovery in US stocks in the late US morning hours is spreading to cryptocurrencies.

Down nearly 1.5% early, the Nasdaq is just shy of the session, while the S&P 500 is up 0.2% and the DJIA is up more than 1%.

Bitcoin at $80,955.28 Bitcoin is up about 3% in the last 90 minutes and is now trading at $82,200, up 0.5% in the last 24 hours.

Solana ( SOL ), the leader in mid-majors, rose 1.7%.

Supporting risk markets is a sharp decline in bond yields, with the 10-year US Treasury now trading at 5.09% after hitting 5.36% yesterday following September's flash CPI report.

Among cryptocurrency-related stocks, Circle Financial CRCL $86.99 · Market Closed is the leader with a 6.7% gain. Also higher Strategy MSTR $151.24 · Market Closed up 2.4%, Coinbase COIN $183.75 · Market Closed up 2.4% and Securitize (SECZ) up 3.9%.

The European Banking Authority (EBA) classified USDC Circle as the first "significant" electronic money token under the EU's Markets in Crypto Assets (MiCA) regulation.

USDC is the first of the 45 tokens registered in MiCA e-money to receive this name. The EBA will oversee the USDC's capital, reserve and liquidity requirements, while the French banking regulator will retain responsibility for governance and other areas.

The EBA also signed an agreement with New York regulators to coordinate oversight of USDC operations across Europe and the United States.

Buyers quickly stepped in, cutting bitcoin's first dip below $80,000 in a month.

The price quickly bounced back above $81,000, still down 1% in the last 24 hours. Solana is down similarly, with Ether and XRP down 2% each.

The jump in crypto is alongside the jump for stocks, with the Nasdaq paring its early big drop to 0.8% and the S&P now down just 0.25%.

The sell-off in Neocloud stocks and Bitcoin mining is deepening. Soluna (SLNH) is down 85% from its high, followed by Boost Run (BRUN) down 77%, Cipher Digital CIFR $10.06 · Market closed at 67, CleanSpark CLSK $9.3460 · Market closed down 60% and CoreWeave (CRWV) up 56%.

As concerns spread from equities to credit markets, CoreWeave has become a focal point. Its unsecured bond, which matures in 2032, traded up to a 15 percent yield, according to Bloomberg. Investors demand significant returns to hold the company's debt, reflecting growing concern about its creditworthiness.

Investor Chamath Palihapitiya highlighted the warning on Tuesday, sharing a chart showing neoclads falling as CoreWeave bonds sell off. After that, CoreWeave shares fell more than 15 percent on Wednesday and 8 percent on Thursday, along with a broader retreat in AI infrastructure stocks. This sequence suggests that credit market concerns preceded the latest stock selloff, although it does not prove that those concerns caused it.

Bitcoin missed the $80,000 level for the first time since mid-September as US stocks extended early losses.

Trading at $79,950, it is now down 3.5% in the last 24 hours.

The Nasdaq was down 1.4% and the S&P 500 was down 0.6%.

Meanwhile, U.S. government bond yields are at a 10-year low, now down 15 basis points to 5.04%.

Bitcoin at $80,955.28 Bitcoin is trading at $80,500 shortly after U.S. stocks opened down 2.9% in the past 24 hours. It only traded above $80,000 in recent minutes, with buyers stepping in to prevent the $79,000 selloff for the first time since mid-September.

For now, the worst fears have not materialized in the tech sector, with the Nasdaq down just 0.9%.

Small gains for Microsoft, Apple, and Google mask the destruction going on in AI interests. Micron, Intel and AMD are all down more than 4%. Dell, Arista Networks and SanDisk are down about 7 percent.

The shockingly fast PPI report did not dampen fixed income.

The 10-year US Treasury yield is at its lowest level, down 14.5 basis points to 5.044 percent. The iShares 20+ Year Treasury Bond ETF ( TLT ) rose 2 percent in premarket trading, extending its return from recent lows to 5 percent.