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Analysts: Bitcoin and US Stock Crash Intensifies Debate Over Fed Rates and the Future of the AI Boom
- Bitcoin has lost more than half of its value from its peak, while Wall Street shed $2 trillion in a single day despite a strong jobs report.
- Experts at The Kobeissi Letter explained the market paradox.
- They noted that they expect Fed rate hikes.
As of 5 June 2026, the US stock market had lost almost $2 trillion in capitalisation after the release of one of the strongest US jobs reports in the past 18 months. Against this backdrop, Bitcoin fell by more than 50% from its October 2025 all-time high, while analysts, investors and crypto industry representatives offered sharply different assessments of what is happening in the market.
What just happened?
The S&P 500 just erased nearly $2 trillion of market cap just hours after the third-strongest US jobs report in 18 months.
Meanwhile, Bitcoin is officially down more than 50% from its record high in October 2025.
What is happening? Let us explain.
— The Kobeissi Letter (@KobeissiLetter), 5 June 2026
According to The Kobeissi Letter, the S&P 500 posted its largest daily decline since October 2025, even though just a few days earlier it had reached a new all-time high amid gains in stocks of companies linked to artificial intelligence.
According to the experts, the main reason for the market reaction was the strong jobs report, which forced investors to reassess expectations for the future policy of the US Federal Reserve.
In particular, the data showed that the number of job openings increased by 731,000 in April, while the consensus forecast had not expected any significant changes. The total number of job openings reached 7.6 million — the highest level since May 2024.
The Kobeissi Letter believes that the market is increasingly pricing in a scenario of tighter monetary policy instead of the previously expected rate cuts.
“The base case now includes two rate hikes before the start of 2027,” the analysts noted.
Bitcoin Finds Itself at the Centre of the Macro Debate
Amid deteriorating sentiment towards risk assets, Bitcoin continued to fall. According to The Kobeissi Letter, the first cryptocurrency lost more than 53% from its October 2025 record high, while the crypto market as a whole shrank by around $2.5 trillion over that period.
Analysts also pointed to several additional factors putting pressure on markets:
Meta’s possible raising of tens of billions of dollars to fund AI development;
Alphabet’s recent announcement that it would raise nearly $85 billion to develop artificial intelligence infrastructure;
preparations for SpaceX’s IPO with a target valuation of around $1.75 trillion and potential proceeds of $75 billion.
According to The Kobeissi Letter, funds may be partially selling assets to build liquidity ahead of large-scale equity offerings.
At the same time, there is no consensus in the crypto community regarding Bitcoin’s outlook.
Reza Bundy, CEO of investment company Atlas Capital, previously said at the Proof of Talk conference in Paris that the first cryptocurrency could lose up to 70% of its value over the next six months.
In his view, under a deflationary recession scenario, Bitcoin could fall to the $26,000–$30,000 range. At the same time, amid active money issuance and rising budget deficits, its price could potentially reach $500,000.
Well-known crypto sceptic Peter Schiff holds a similarly cautious view. After the latest correction wave, he said the market had not yet formed a bottom and that Bitcoin could theoretically fall below $20,000.
Some Investors See the Decline as an Opportunity
At the same time, not all market participants view the current correction as the beginning of a prolonged bear cycle.
ARK Invest founder and CEO Cathie Wood said investors may be misinterpreting the strong jobs data.
The jobs report was extremely strong. Nonfarm payrolls increased by 172,000 versus expectations for 88,000, while prior months were revised higher by 93,000. Wage growth came in at roughly 0.3%.
Yet the market sold off.
In our view, the market is misreading the signal.
— Cathie Wood (@CathieDWood), 6 June 2026
“The market is misreading the signal. It assumes that stronger-than-expected employment and economic growth will lead to accelerating inflation. History suggests the opposite,” Wood noted.
In her view, labour productivity continues to rise thanks to technological innovation, above all the development of artificial intelligence, which may have a deflationary effect on the economy.
However, some investors believe the current correction is the result not of deteriorating economic fundamentals but of a shift in capital market sentiment. In particular, Bitwise Chief Investment Officer Matt Hougan noted that market participants are concerned about a wave of future mega-IPOs by technology companies, which could absorb significant amounts of liquidity.
“It is quite unusual to see practically all assets falling — not just cryptocurrencies — especially against the backdrop of strong jobs data. It feels like there is real concern that future mega-IPOs will mark the top of the current technology rally. I do not think that is the case in the long term, but this kind of sentiment could dominate for several more weeks,” Hougan said.
At the same time, Strategy founder Michael Saylor recently published an essay, The Four Ideologies of Bitcoin, in which he said that the future of the first cryptocurrency depends on the balance between four groups of its supporters — maximalists, capitalists, technologists and fundamentalists.
See also: "Why Is Bitcoin Falling, and Could It Crash to $50,000?"
