According to Tuur Demeester (founder of Adamant Capital), a potential decoupling scenario could occur between Bitcoin ( BTC and the Nasdaq Composite, which can cause BTC prices to surpass $100,000 in 24 months.
Bitcoin outperforms tech stocks
Demeester compared Bitcoin’s rising market value to the tech-heavy U.S. Stock Market Index. This highlighted its ability for breakout every time it happens after a period with strong consolidation.
He wrote that “it may do so again in the next 24 months”, citing the attached chart.
According to data from the BraveNewCoin Liquid Index (BLX), Bitcoin’s price has risen from $0.06 to $69,000 over a decade since its introduction to market.
This represents a 64.50 percent increase in Bitcoin’s value since 2010. Nasdaq’s returns over the same period are nearly 650%, going from 20.99 points in June 2020 to 171.54 by February 18, 2022. Bitcoin’s market capital has risen to $755 billion, compared to Nasdaq’s $28.68 million.
Is Bitcoin going to decouple again from tech stocks?
In Bitcoin’s history, there have been multiple periods of strong correlation to U.S. tech stocks. As Bloomberg data shows, the cryptocurrency’s correlation efficiency with Nasdaq was 0.73 earlier this month. This is almost at its five-year peak of 0.74 in 2020.
BTC’s token price fell from $69,000, a record, to $33,000 last month due to broader market risk. This decline was caused by the Federal Reserve’s decision in January 2022 to raise benchmark rates to combat rising consumer prices. reached their four-decade high last January.
Matthew Sigel, VanEck Associates’ head of digital assets research, predicted that Bitcoin would fall along with Nasdaq, other U.S. stock indices, although more severe. He does note that Bitcoin volatility has been trending down in recent years. Comparatively, the Nasdaq 100 has shown more standard deviation moves over its five-year average.
According to the outlook, Bitcoin is steadily improving and becoming a reliable safe-haven asset that can withstand rising inflation. Its correlation with tech stocks and other risk-on assets could decrease.
“It’s correlated for now,” He also noted:
What happens if you make a policy error? “But what happens if you make a policy mistake, i.e. the Fed raises too quickly or doesn’t increase enough? That would lead to an inflation problem. This would be more favorable to Bitcoin than it would be for equities.
Joey Krug, CEO at Pantera Capital, a crypto-focused hedge funds, predicts decoupling will occur in the “next few weeks,” noting that “crypto” will trade on its own.
The $100K BTC price goal
Demeester pointed out that Bitcoin’s ability, despite being under pressure from its Nasdaq correlation, to hold around $50,000 was one of the main reasons it could begin a run up towards $100,000.
This price target was in line with the expectations of Goldman Sachs at 2022’s beginning. According to the investment giant, which has $1.2 trillion in assets worldwide, Bitcoin could reach $100,000 if they take some of the market share for gold, a traditional safe haven asset. Bitcoin’s market capital today is less than 6% of that of gold.
