Economist Henrik Zeberg warns that Bitcoin (BTC) is not a unique, safe haven, but rather a highly risky asset that reflects the performance of the Nasdaq.
According to Zeberg, both markets are closely linked to each other due to their connection to the technology sector, he said in an August 9th post.
His analysis is driven by historic price movements, showing that Bitcoin and the Nasdaq have risen and fall in recent years in a near-recent simultaneous quarter.
“BTC is not a “special asset.” It is a risky asset. In fact, it is a very risky asset.<…>TechBubble2 is currently under development. BTC is part of it.
He said the correlation was not a coincidence. This is because investors’ feelings about high-growth tech stocks apply to Bitcoin. Cryptocurrencies thrive in a risk-on environment, but struggle during risk-off periods.
Second Technology Bubble
Zeberg warned that the current background points to the emergence of what he calls “Tech Bubble 2.” The chart accompanying his post shows the Nasdaq surge as Nasdaq hits highs as Bitcoin recovers, with the US market capitalization and GDP-GDP ratio at 226%, far above and beyond the long-term average before the 2007-2008 financial crisis.
In particular, Zeberg observed that even if Nasdaq returns to 2022 levels, the market capitalization to GDP ratio would be higher than the peak of the last major bubble.
He believes the current bubble peak is likely to be consistent with the onset of a recession, causing a sharp and rapid economic recession with Nasdaq and according to Bitcoin.
In short, Zeberg warned that investors risked the euphoria surrounding both tech inventory and Bitcoin, as well as serious losses when the bubble burst.
His warning comes when both Bitcoin and stocks are trading at new highs, with digital currency extending multiple sessions beyond the key $110,000 support zone. As of press time, Maiden’s digital currency is trading at $116,622, up almost 4% on the weekly chart.
Featured Images via ShutterStock
