A combination of rising credit stress, stubborn inflation data and escalating geopolitical tensions has investors retreating from risk assets.
Bitcoin slid back below $66,000 early Friday in U.S. trading as macroeconomic worries weighed on sentiment. The largest cryptocurrency has now given up most of Wednesday’s rally, dropping about 3% in a matter of hours from near $68,000 to roughly $65,600. The broader CoinDesk 20 Index fell 2.3% over the past 24 hours, with Ethereum, XRP, and Solana posting comparable declines.
Crypto-linked equities also retreated, surrendering part of their earlier weekly gains. Strategy (MSTR), the largest corporate holder of bitcoin, slipped 3%, while Coinbase (COIN) fell more than 2%. Stablecoin issuer Circle (CRCL) dropped nearly 5%, snapping a sharp rebound that had lifted the stock almost 50% in just a few sessions.
Crypto miners — increasingly viewed as tied to AI infrastructure buildout — fared even worse. IREN, Cipher Mining (CIFR), Core Scientific (CORZ) and TeraWulf (WULF) tumbled between 6% and 8%.
The downturn coincided with weakness in traditional markets. The tech-heavy Nasdaq Composite fell 0.8%, while the S&P 500 declined 0.6%.
Mounting Macro Pressures
Several factors contributed to the risk-off mood.
A hotter-than-expected Producer Price Index (PPI) report dampened hopes that inflation is steadily cooling. Core PPI rose 3.6% year over year in January, exceeding forecasts of 3.0% and accelerating from the prior 3.3% reading. As a result, markets are now pricing in a 96% probability that the Federal Reserve will hold rates steady at its March 18 meeting.
At the same time, credit market stress remains a concern. Credit spreads have widened to their broadest levels in four months. Shares of private equity giants KKR, Ares Management, and Apollo Global Management sank 6%–7%, hitting fresh session lows.
Geopolitical tensions have added another layer of uncertainty. Prediction markets showed rising odds of potential U.S. military action against Iran after reports that the U.S. began evacuating some embassy personnel from Israel.
Safe-Haven Flows Strengthen
Capital rotated into traditional safe havens. The U.S. 10-year Treasury yield dipped below 4% for the first time since November 2024. Gold gained 1% to trade above $5,230 per ounce, while silver surged 4% to reclaim the $92 level. Crude oil also climbed 2.3%, moving back above $67 per barrel.
According to Paul Howard, director at trading firm Wincent, bitcoin’s upside appears constrained in the current environment. Following February’s options expiry, traders are positioning for BTC to remain capped below the $72,000–$74,000 range, with support seen around $54,000 through March.
“A cautious approach still appears warranted, particularly given that March has historically been a weaker month for crypto majors,” Howard said.
