Shares shifted sharply lower Thursday as Bitcoin surrendered an overnight rally to nearly $85,000, dragged down by a one-two punch: disappointing megacap earnings that reignited doubts about AI spending, and Middle East hostilities that pushed oil toward five-month highs. BITO, the ProShares futures-based Bitcoin ETF, fell 3.4% to $10.90, extending a volatile stretch for shareholders already nursing deep structural losses.
• Tech Earnings Spooked the Entire Risk Trade, Crypto Included
Meta beat on revenue and raised its AI spending plans, while Tesla cut its capital expenditure, and neither reassured the wider market — Nasdaq 100 futures fell and Asian chip stocks slid.
Worries are mounting that heavy spending on data centers will take longer to pay off and that this year's rally has left valuations stretched. Bitcoin trades increasingly in lockstep with tech stocks, so when the Nasdaq stumbles, crypto follows. Bitcoin briefly surged past $84,000 but retreated to a critical support level of $82,500 as tech stock futures fell.
• Oil Near Five-Month Highs Puts a Floor Under Inflation Fears
Oil prices rose Wednesday as traders weighed growing threats to Middle East crude supplies, with Brent crude moving closer to a five-month high of $110.11 per barrel.
Reports suggesting that a resumption in U.S. and Israeli hostilities against Iran was imminent also spooked markets. Higher energy costs threaten to keep the Federal Reserve cautious on rate cuts — a headwind for speculative assets like Bitcoin that thrive on easy money.
• BITO's Futures Structure Magnifies Every Downturn
Bitcoin gained 85% over five years while BITO lost 24%, a gap created by its 0.95% expense ratio and monthly futures roll decay. Each month the fund sells an expiring contract and buys the next one at a higher price — a hidden drag that has produced tracking errors averaging 5–12% annually compared to spot Bitcoin prices. Spot Bitcoin ETFs like IBIT charge just 0.25% and hold actual Bitcoin, eliminating the contango drag entirely and costing 70% less annually. In a sell-off, BITO's structure amplifies losses.
• Jobless Claims and Next Week's Earnings Could Set Direction Weekly U.S. jobless claims data, due at 8:30 a.m. ET, will test whether the labor market is softening enough to revive rate-cut hopes. With no megacap results until Microsoft and Alphabet next week, oil takes over as the near-term driver. For BITO holders, the calculus is straightforward: they are paying a premium wrapper to ride an asset caught between geopolitical risk and fading AI enthusiasm — a costly bet if Bitcoin stays range-bound.