r/options
Semiconductors vs crypto this week told the same story from two angles.
Semis and crypto crashed as AI chip cycle decelerates, yields surge on strong NFP, and the Fed holds rates.
- AI chip upgrade cycle may be decelerating, leading to massive sector sell-offs.
- Strong NFP data sent yields sharply higher, pressuring equities and keeping the Fed from cutting rates.
Semiconductors vs crypto this week told the same story from two angles.
SOX -10.3% Friday. Nasdaq -4.18%. Worst chip session since March 2020. Nvidia -6.2%, Micron -13.25%, Marvell -16.74%. The sector lost $1.3 trillion in two sessions after Broadcom reiterated rather than raised AI chip guidance, then NFP came in at 172,000 vs 85,000 expected, sending yields sharply higher.
Crypto fear and greed: 12. Bitcoin at $61,252, down 3.22% on the day. ETF outflows continuing. Perpetual positioning heavily short.
The divergence that looked like "equities greed vs crypto fear" all week resolved Friday into a single macro read: the AI chip upgrade cycle may be decelerating, yields are rising, and the Fed is going nowhere. VIX at 21.51, first close above 20 since April.
FOMC meets June 16-17. CME FedWatch: 98.7% hold probability. June 10 CPI is the last major input before Warsh's first dot plot. That is the event that resets positioning for the second half of 2026.
the semiconductor and crypto correlation breakdown this week makes sense when you think about what's driving each. chips sold off on a guidance narrative (broadcom reiterated not raised) while crypto dumped on macro flows. same risk-off impulse but the catalysts are completely different. the question is whether the AI chip selloff creates an entry or signals a real re-rating of the growth story
or perhaps its a healthy correction after such a strong rally
could be both honestly. healthy correction after a strong rally that happens to coincide with sector rotation. the question is whether the pullback holds at prior support or breaks through - that tells you if it's a breather or a trend change
SOX and BTC selling off together is the clearest risk-off confirmation you can get. When those two diverge it's noise, when they converge downward it's institutional de-risking across the board.
The CPI print on the 10th is the real setup. If it comes in hot, that FOMC meeting is just Powell confirming what the bond market already priced. If it's cool, the snapback in semis will be violent. Either way I'm not touching anything until after Wednesday.
During FOMC we should watch the statement language, not the rate decision itself. A hawkish shift in the wording is the tell for what the committee has planned for Q3.
AI chip demand and crypto mining use different hardware now. modern LLM training runs on H100/B200 GPUs while most crypto mining moved to ASICs years ago. the supply crunch is in datacenter GPUs specifically - crypto miners aren't competing for the same silicon anymore
I think there is still strong demand. Although anthropic and OpenAI’s ipo will tell the story
anthropic IPO will be the real tell. if they price at $60B+ and the demand is there, it confirms the AI infrastructure thesis is still intact. the current dip looks more like rotation than fundamental demand destruction
appreciate the honest breakdown. most people sugarcoat this kind of thing.
interesting angle. spacex secondary market selloffs tend to create liquidity events that ripple through tech/growth allocations broadly. wouldn't be surprised if some of the semis rotation is portfolio rebalancing from spacex sellers moving into safer bets
good question. the SPCE selloff (SpaceX IPO ticker confusion + dilution) added general risk-off sentiment but it's a small cap, not big enough to move the entire semi or crypto sectors on its own. the timing overlapped though which made everything look more correlated than it actually was
AI chips and crypto mining use different hardware now. AI training runs on specialized chips (H100, B200) that are designed for matrix math, not SHA-256 hashing. the GPU mining era for crypto is basically over since ethereum went proof of stake. so AI chip demand doesn't affect crypto mining costs, they're competing for different silicon
A massive crash is coming. At least 30%. Hold on.
Ok Micheal bury
Yes and no. Rates on the 10 and 30 year aren’t even at their recent highs which were struck in the middle of May, when this AI/semi trade was still going parabolic.
It’s that positioning finally reached critical mass, the market got nervous about paper profits, and looked for a reason to sell.
The “why” is just human nature to look for in retrospect, but it’s always positioning.
Otherwise we would have sold off mid-May when rates were, in fact, higher.