IREN Ltd (NASDAQ:IREN), a crypto-linked company, saw its stock price plummet by 8.60% in pre-market trading on Friday, extending its losses from the previous day. The significant drop comes amid a broader decline in cryptocurrency prices, criticism from a prominent short-seller, and escalating U.S.-China trade tensions affecting the crypto market.

The primary driver behind IREN's stock decline appears to be the recent downturn in the cryptocurrency market. Bitcoin, the leading digital currency, has experienced a substantial pullback from its recent record high of over $126,000. As IREN uses its Bitcoin gains to fund its AI infrastructure pivot, the crypto market downturn has directly impacted its stock performance. The weakness in the crypto market has been attributed to escalating U.S.-China trade tensions, with both nations implementing new port fees on shipping companies.

Adding to IREN's woes, renowned short-seller Jim Chanos publicly challenged the company's bullish outlook earlier in the week. Chanos criticized a recent Cantor Fitzgerald research report, questioning its projections of 80% EBITDA margins for IREN's AI data center operations. He also raised concerns about the depreciation assumptions for IREN's planned $2.9 billion equipment purchases, suggesting an unrealistic nine-year lifespan for rapidly obsolescing GPU hardware. This criticism has likely contributed to investor uncertainty and the subsequent sell-off in IREN's stock, leading to the significant pre-market plunge.