Peter Schiff Predicts Bitcoin to Drop Below $65K if Nasdaq Crashes
Economist and market commentator Peter Schiff cautions that Bitcoin could face severe losses if the broader market downturn continues.
He argues that Bitcoin’s strong correlation with the NASDAQ makes it particularly vulnerable, predicting that if the tech-heavy index declines further, the leading cryptocurrency could experience even steeper drops.
“The NASDAQ is down 12%,” Schiff noted Sunday on X. “If this correction turns out to be a bear market, and the correlation where a 12% decline in the NASDAQ equates to a 24% decline in Bitcoin holds, when the NASDAQ is down 20%, Bitcoin will be about $65K.”
Bitcoin last traded around $83,484, down 14.5% over the past month. But Schiff believes a more significant downturn is still ahead.
Past Market Crashes Signal Deeper Bitcoin Decline: Peter Schiff
While Bitcoin has often been called “digital gold,” its price movements have historically aligned more closely with the NASDAQ than with gold itself. During past market downturns, the NASDAQ has suffered significant losses.
Schiff referenced three major bear markets as historical examples of severe downturns. During the Dot-com crash between 2000 and 2002, the NASDAQ plummeted nearly 80%, wiping out billions in market value. The 2008 financial crisis triggered another steep decline, with the NASDAQ falling 55% as economic instability shook global markets. In 2020, during the COVID-19 market crash, the NASDAQ dropped 30%, reflecting widespread investor panic and uncertainty.
On average, these bear markets resulted in a 55% drop. Even if this time the NASDAQ only declines 40%, Schiff argues that Bitcoin’s drop would be far more dramatic. “That would put Bitcoin at about $20k” he warned. “However, my bet would be that a drop of that magnitude would accelerate Bitcoin’s collapse to much lower levels.”
Market Volatility Could Drive Gold to New Highs, Schiff Suggests
While Bitcoin remains closely tied to tech stocks, Schiff pointed out that gold has been moving in the opposite direction. Since the NASDAQ peaked in Dec. 2023, gold has risen 13%, displaying a near perfect inverse correlation. If that trend continues, a 40% drop in the NASDAQ could push gold above $3,800 per ounce.
However, Schiff believes gold’s upside could be even greater if a market downturn triggers a significant decline in the US dollar on foreign exchange markets. “If a bear market in stocks coincides with a significant decline in the dollar on foreign exchange markets, gold will rise much higher,” he said.
Bitcoin’s Store-of-Value Narrative at Risk?
Schiff’s bearish outlook extends beyond price action. He argues that if Bitcoin suffers an 85% drop relative to gold, it could shatter the narrative that Bitcoin is a reliable store of value.
“There will clearly be no justification for the US government or any state government to keep any Bitcoin in a Strategic Reserve,” he said. “There will also be no reason for ETF investors to keep holding their positions either. With all that selling, it will be impossible for $MSTR to sell enough Bitcoin to avoid bankruptcy.”
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