Bitcoin Collapse Likely Alongside Nasdaq on Popping of Tech Bubble According to Zeberg
A notable and increasing correlation between the Nasdaq 100 index and Bitcoin has been observed over the past three years, with short-term correlation values rising to around 0.7 or higher[1][4][5]. This means that the two assets tend to move in the same direction more often than before, especially over recent periods.
The primary reason for this correlation is that both Bitcoin and the Nasdaq are perceived as high-risk, speculative assets favored by similar investor profiles who are sensitive to liquidity conditions and market sentiment[1][2]. Both markets are influenced by macroeconomic factors such as central bank policies, risk appetite, and speculative trading dynamics. Danish economist and financial analyst Henrik Zeberg argues that this correlation arises because both assets are prone to bubbles and driven by enthusiasm around technology and growth sectors, which can lead to synchronized rallies and crashes[2].
Historically, Bitcoin's correlation with equities including the Nasdaq and the S&P 500 has fluctuated—there were periods of low or even negative correlation during Bitcoin-specific bull runs, but more recently the correlation has grown stronger as global macroeconomic factors caused risk assets to move in tandem[3]. This highlights that Bitcoin can sometimes behave like an independent, unique asset but increasingly acts like a risk-on asset aligned with tech stocks and growth equities.
Zeberg, who has predicted a potential Bitcoin crash, believes that the U.S. stock market is currently in a major bubble and that there is currently another tech bubble in the making[6]. He warns traders to be cautious of the "bubble euphoria" regarding Bitcoin and advises them to consider Nasdaq movements as a meaningful factor affecting Bitcoin price behavior and risk[1][2][3].
As of now, Bitcoin is trading at $118,336, close to a new peak[6]. The current market capitalization-to-GDP ratio is higher than on the verge of the global financial crisis in 2007, according to Zeberg[6]. These factors, combined with the increasing correlation between Bitcoin and the Nasdaq 100 index, suggest that investors should approach the crypto market with caution and consider the potential risks involved.
| Aspect | Details | |----------------------------|------------------------------------------------------------------------------------------| | Correlation level | Increased dramatically, 30-day rolling correlation with Nasdaq ~0.7+ | | Reason for correlation | Both are risk-on assets influenced by speculative investor behavior and liquidity dynamics| | Economic context | U.S. tech bubble concerns, macroeconomic factors, and risk sentiment drive synchronicity | | Historical variation | Shifted from mostly uncorrelated or negatively correlated to much stronger positive correlation recently| | Zeberg's Predictions | U.S. stock market in a bubble, another tech bubble in the making, potential Bitcoin crash | | Current Bitcoin Price | $118,336, close to a new peak | | Market Capitalization-to-GDP Ratio | Higher than on the verge of the global financial crisis in 2007 |
- The correlation between Bitcoin and the Nasdaq 100 index, often exceeding 0.7, demonstrates a significant increase over the past three years, indicating that these two assets tend to significantly move in the same direction.
- Investors should be aware that both Bitcoin and the Nasdaq are perceived as high-risk, speculative assets, favored by similar profiles, who pay close attention to liquidity conditions and market sentiment.
- Historically, Bitcoin's correlation with equities such as the Nasdaq has fluctuated, but over recent periods, it has grown stronger due to global macroeconomic factors that influence risk assets to move in tandem.
- Danish economist and financial analyst Henrik Zeberg, who has predicted a potential Bitcoin crash, advises traders to follow Nasdaq movements when analyzing Bitcoin price behavior and assessing associated risks.
- The current Bitcoin price at $118,336, close to a new peak, combined with the increased correlation between Bitcoin and the Nasdaq 100 index, suggests that investors should approach the crypto market with caution, as the market capitalization-to-GDP ratio is higher than on the verge of the global financial crisis in 2007.
