HomeMarket NewsBitcoin

Bitcoin Could Plunge as Nasdaq Bubble Bursts, Economist Issues Stark Warning

Bitcoin Could Plunge as Nasdaq Bubble Bursts, Economist Issues Stark Warning

  • Analyst warns Bitcoin could crash alongside a falling Nasdaq.
  • Tech bubble fears grow as Bitcoin nears record price levels.
  • Market risks rise with valuations exceeding pre-2007 crisis levels.

According to Danish economist and financial analyst Henrik Zeberg, Bitcoin could face a sharp downturn if the Nasdaq 100 suffers a significant correction. He believes the cryptocurrency is not unique in its behavior and reacts much like other high-risk assets during market turbulence.


Zeberg cautions that the United States stock market is currently in a bubble as it is trading at higher prices than it was before the 2007 global financial crisis. He pointed out that the market capitalization-to-GDP ratio has now gone even further up, indicating extreme market conditions.


The economist described a strong correlation between Bitcoin and the Nasdaq since both are considered risk-on investments. As the markets are driven by optimism, speculative traders can raise the price, and when the sentiment changes, the same assets can drop dramatically. The two markets are also susceptible to liquidity fluctuations, which may increase price fluctuations.


Also Read: Ripple CTO Clarifies Timing of XRP Escrow Releases Amid Speculation


Zeberg Sees Bitcoin Following Tech Stocks in Potential Crash

Zeberg stressed that Bitcoin’s movement alongside technology stocks is logical, given its deep connection to the tech-driven investment space. He referred to the existing climate as an emerging tech bubble and warned that cryptocurrencies will not be able to avoid its effects.


In the recent past, the Nasdaq 100 has registered a new intraday high of 21,464 points, indicating good performance by technology stocks. Meanwhile, Bitcoin is trading at an almost all-time high of 118,336.


However, Zeberg cautions that such peaks may just as soon turn the other way around should the Nasdaq start to decline. He counselled traders to be careful and not to be carried away by the euphoria that usually accompanies a market decline.


Zeberg warning confirms that Bitcoin’s future is highly dependent on the health of the tech sector. If the Nasdaq bubble bursts, investors could see steep losses in both technology stocks and cryptocurrencies.


Also Read: Crypto Expert Warns of Rising Scams Targeting XRP Community