According to Thor DeMaster, founder of Adamant Capital, a possible split scenario between Bitcoin (BTC) and Nasdaq Composite could send BTC up to $ 100,000 within 24 months.
Bitcoin surpasses technology stocks
Demister portrayed Bitcoin’s rising market value against the technically challenging US stock market reference, highlighting its ability to break through each time after a period of strong consolidation.
“This could happen again in the next 24 months,” he wrote, quoting the chart below.
Weekly price chart of BTC / USD vs. Nasdaq Composite. Source: Tuur Demeester, StockCharts.com
The price of BTC rose from $ 0.06 to $ 69,000 more than a decade after it was introduced to the market, according to data tracked by the BraveNewCoin Bitcoin Liquidity Index (BLX).
BTC / USD Monthly Price Chart vs. Nasdaq Composite. Source: Trading View
This is an increase in the price of bitcoin of approximately 64.50 million percent since 2010. In comparison, Nasdaq gave a return of almost 650% in the same period, from 20.99 points June 22, 2020 to 171.54 points February 18, 2022 As a result, the market value of bitcoin has grown. to $ 755 billion compared to $ 28.68 billion on the Nasdaq.
Will Bitcoin ever differ from technology stocks again?
There have been several periods in Bitcoin’s history so far with its strong connection to US technology stocks. For example, earlier this month, the cryptocurrency’s Nasdaq correlation efficiency reached 0.73, near a five-year high of 0.74 in 2020, according to Bloomberg data.
Bitcoin price dynamics and technology stocks since then. September 2017. Source: Bloomberg.
The price of BTC per token fell from a maximum of $ 69,000 to less than $ 33,000 last month amid sales in broader risk markets. This decline was accompanied by a decision by the Federal Reserve to raise reference prices sharply amid rising consumer prices, which reached their highest level in four decades in January 2022.
Matthew Siegel, head of digital asset research at VanEck Associates, expects bitcoin to coincide with Nasdaq and other US stock indices, albeit at a more risky pace. However, he pointed out that Bitcoin’s volatility has been on a downward trend in recent years. In comparison, the Nasdaq 100 showed more standard deviation movements than the five-year average.
The predictions are that bitcoin will gradually improve to become a reliable and secure resource in the face of rising inflation. As a result, his attitude toward risky assets such as technology stocks may decline.
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“This is relevant at the moment,” James Butterville, head of research at data analysis firm CoinShares, told Bloomberg, adding that the cryptocurrency is “very sensitive to interest rate problems.” he is not:
“But what happens in a situation where you have a political mistake, like the Fed going up too much, or they not going up enough, and that’s an inflation problem. In fact, it can support bitcoin more and support stocks less.”
In addition, Joey Krug, CEO of Pantera Capital, a hedge fund focused on cryptocurrencies, expects the split to take place “weeks ahead”, noting that “cryptocurrencies will start trading on their own.”
$ 100,000 BTC price target
Demister cited Bitcoin’s ability to consolidate around $ 50,000 despite pressure from the Nasdaq relationship as one of the main reasons it could start a rally against $ 100,000.
The price target was in line with Goldman Sachs’ expectations in early 2022. The investment giant, which manages $ 1.2 trillion in assets worldwide, has indicated that bitcoin could reach $ 100,000 if it takes some market share away from gold, which is a normal order safe port assets. Today, the market value of Bitcoin is just under 6% of the market value of gold.