Bitcoin Faces 85% Drop as NASDAQ Declines 12%
1min read Peter Schiff, a well-known economist, has predicted a significant drop in the price of Bitcoin, citing a correlation between the performance of the NASDAQ and the flagship cryptocurrency. Schiff, who is a vocal skeptic of Bitcoin, suggested that a decline in the NASDAQ could lead to a substantial decrease in the value of Bitcoin. Currently, the NASDAQ has experienced a 12% decline, which Schiff believes could impact Bitcoin's price. He further elaborated that if the NASDAQ were to enter a bear market, the decline in Bitcoin could be much more severe, potentially reaching levels seen in past bear markets.
Ask Aime: Could the NASDAQ's 12% decline affect Bitcoin's price severely?
Schiff referenced historical data to support his prediction. After the Dot-com bubble burst, the NASDAQ plummeted by nearly 80%. During the 2008 global financial crisis, it dropped by 55%, and during the pandemic crash in 2020, it fell by around 30%. The average decline in these three bear markets is 55%. Schiff speculated that if the current bear market results in a 40% decline in the NASDAQ, Bitcoin could drop to around $20,000. However, he believes that such a drop could accelerate Bitcoin's collapse to even lower levels.
In contrast to his bearish outlook on Bitcoin, Schiff offered a more optimistic view on gold. He noted that since the NASDAQ peaked on December 16, 2023, gold has increased by 13%, indicating a strong negative correlation between the NASDAQ and gold. Schiff suggested that if this correlation holds, a 40% drop in the NASDAQ could push gold prices over $3,800. He also speculated that if a bear market in stocks coincides with a significant decline in the dollar on foreign exchange markets, gold prices could rise even higher.
Schiff compared the potential performance of gold and Bitcoin, stating that even if gold were to reach $3,800 and Bitcoin were to drop to $20,000, the firstborn cryptocurrency would decrease by 85% in terms of gold. This comparison, he argued, would undermine the notion that Bitcoin is a store of value similar to gold. Schiff also suggested that there would be no justification for governments to keep Bitcoin in strategic reserves or for ETF investors to maintain their positions, leading to significant selling pressure and potential bankruptcy for companies heavily invested in Bitcoin, such as microstrategy.
As of the latest information, Bitcoin is trading at $82,433 with a market cap of over $1.6 trillion. Schiff's predictions highlight the potential risks and volatility associated with Bitcoin, emphasizing the importance of considering historical market trends and correlations when evaluating the cryptocurrency's future performance.
