According to Tuur Demeester, founder of Adamant Capital, a possible split between Bitcoin and the Nasdaq Composite could propel the Bitcoin price to $100,000 within 24 months.
Demeester was to compare BTC’s growing market valuation with Tech Heavy’s US stock market index underscores the possibility of a breakout at any time after a period of strong consolidation.
“BTC could do it again within the next 24 months.”
Weekly price chart belong BTC/USD and Nasdaq composed | Source: Tuur Demeester, StockCharts.com
BTC’s price has surged from just $0.06 to $69,000 more than a decade after its launch.
Monthly BTC/USD price chart and Nasdaq composed | Source: TradingView
As such, the price of BTC has increased by approximately 64.5 million percent since 2010. Meanwhile, Nasdaq’s return over the same period is nearly 650% — from 20.99 points on June 22, 2020, to 171.54 on February 18, 2022. As a result, BTC’s market cap has grown to $755 billion compared to $28.68 billion from Nasdaq.
BTC’s history to date has seen several periods of strong correlation with US tech stocks. For example, earlier this month, the correlation between the leading cryptocurrency and the Nasdaq hit 0.73, which is roughly a five-year high of 0.74 set in 2020, according to data from Bloomberg.
Price development of bitcoin and tech stocks since September 2017 | Source: Bloomberg
BTC price fell from a record high of $69,000 to just under $33,000 over the past month amid a sell-off in the risk assets market. The drop coincided with the Federal Reserve’s decision to raise interest rates in response to rising consumer prices, which hit a four-decade high in January 2022.
Matthew Sigel, Head of Digital Asset Research at VanEck Associates, guess Bitcoin will fall alongside Nasdaq and other US stock indexes, albeit more sharply. However, he noted that Bitcoin’s volatility has been declining in recent years. Meanwhile, the Nasdaq 100 showed more standard deviation moves than its five-year average.
The background shows that Bitcoin is slowly becoming a reliable safe haven against escalating inflation. As a result, its correlation with risky assets like technology stocks could decrease.
James Butterfill, head of research at data analytics company CoinShares, to speak with Bloomberg:
“It’s correlated now. This cryptocurrency is very sensitive to concerns about rising interest rates.
But what happens in a situation where you make a policy mistake, like when the Fed has raised too much or not enough and there is an inflation problem. That would actually be more in favor of bitcoin and less in favor of stocks.”
Additionally, CEO Joey Krug of Pantera Capital, a crypto-focused hedge fund, is forecasting divergence in the coming weeks, noting that “cryptocurrencies will start trading on their own.”
Demeester cited the possibility of Bitcoin consolidating around $50,000 despite relative pressure on Nasdaq as one of the main reasons why it could start to rally towards $100,000.
This target price is in line with Goldman Sachs forecasts for early 2022. The $1.2 trillion global wealth management investment giant notes that Bitcoin could reach $100,000 if it takes a single market share from gold – the traditional safe Harbor. Bitcoin’s market cap is currently just under 6% that of gold.
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