Bitcoin Price Could Crash to $20K: Schiff's Bear Market Warning
Bitcoin's struggle to break the $84,000 resistance has fueled bearish predictions, particularly given the recent US stock market correction. Prominent economist Peter Schiff warns that a 40% Nasdaq correction, signaling a bear market, could trigger a Bitcoin price collapse to $20,000.
NASDAQ Decline and Bitcoin Price Correlation
The Nasdaq's 12% decline in recent weeks is a key concern for Schiff. Historically, a similar Nasdaq drop correlates with approximately a 24% Bitcoin drop, potentially placing Bitcoin around $65,000. A further 20% Nasdaq decline could push Bitcoin down to around $55,000.
Schiff points to historical Nasdaq corrections during the dot-com bubble (~80%), the 2008 financial crisis (55%), and the 2020 COVID crash (30%). Based on these precedents, even a 40% drop could trigger a Bitcoin crash to $20,000.
Schiff isn't alone in his bearish outlook. Bloomberg analyst Mike McGlone has predicted a Bitcoin crash to $10,000. This contrasts with Gold's recent strength.
The upcoming US Federal Reserve decision, following February's cooling inflation data, is a major market driver. High daily trading volumes indicate significant trader anticipation.
Gold's Inverse Correlation with Nasdaq
Unlike Bitcoin, gold shows a negative correlation with the Nasdaq. Since the Nasdaq's December 16, 2023 peak, gold has risen 13%. Schiff predicts that a 40% Nasdaq decline could push gold prices above $3,800, potentially higher if the US dollar weakens.
With gold at $3,800 and Bitcoin at $20,000, Bitcoin's value relative to gold would plummet, potentially challenging its status as a store of value.
Schiff's Concerns about Government Bitcoin Adoption
This divergence between Bitcoin and gold could undermine Bitcoin's narrative as "digital gold." Schiff believes this could deter governments and ETF investors from holding Bitcoin reserves. The resulting massive sell-off could also create financial distress for companies like MicroStrategy, making it difficult to manage their Bitcoin holdings.
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Disclaimer: This analysis presents market perspectives and should not be considered financial advice. Conduct thorough research before making investment decisions. Codeum is not responsible for any financial losses.