- NASDAQ’s 12% fall signals the risk of a more profound bear market, potentially duplicating past 55% drops.
- If NASDAQ drops by 40%, Bitcoin can drop below $20,000, gold can rise over $3,800.
- BTC’s 85% decline relative to gold may threaten its store-of-value use case, triggering mass liquidations.
Bitcoin’s inability to break the $84,000 resistance level has set off fresh concerns among market analysts. As the U.S. stock market witnesses a sharp correction, Peter Schiff has warned that if the Nasdaq plunges into a bear market, BTC can be dragged down to $20,000. He made the forecast relying on historical trends that have witnessed Bitcoin following Nasdaq’s trajectory—though with more pronounced losses.
The Nasdaq is already down 12% over the past few weeks. If the trend continues and the index falls by 20%, BTC could find support at $65,000. However, Schiff points out that past dips have been far more severe. The Dot-com bubble saw Nasdaq crashing by nearly 80%, while the 2008 financial crisis and the 2020 COVID crash saw it go down 55% and 30%, respectively.
A full-fledged bear market for the Nasdaq would be a 40% drop, which Schiff believes would trigger Bitcoin’s fall to $20,000. “a drop of that magnitude would accelerate Bitcoin’s collapse to much lower levels,” Schiff tweeted. His predictions are adding to concerns about its vulnerability in a risk-off market environment.
Gold Surges as Bitcoin Falters
While Bitcoin has been struggling, gold has moved in the opposite direction. Gold prices have risen 13% since the Nasdaq topped on December 16, 2023, reinforcing its safe-haven reputation. Schiff asserts that if the Nasdaq falls 40%, gold can reach as high as $3,800 per ounce. If this plays out, Bitcoin priced in gold could lose 85%, further undermining its reputation as “digital gold.”
The inverse relationship between BTC and gold has become increasingly evident. Investors seeking stability from market volatility have piled into gold, while the cryptocurrency remains highly susceptible to broader market moves. Schiff thinks the divergence can deter governments and institutional investors from holding BTC in reserves, limiting its long-term adoption.
Schiff is not alone in his bearish forecast for Bitcoin. Bloomberg analyst Mike McGlone has recently gone even further, saying that it could drop to $10,000. Such warnings have fueled investor anxiety, especially as daily trading volumes have surged in anticipation of the Federal Reserve’s decision on policy.
Bitcoin Faces Selling Pressure
Adding to its difficulties, Peter Schiff warned that the mounting selling pressure could cause some big institutional holders into financial distress. MicroStrategy, a company that has heavily invested in BTC, was singled out by Schiff in particular. Schiff argued that it would be “impossible for $MSTR to sell enough Bitcoin to avoid bankruptcy,” if prices tanked.
Despite the bearish outlook, the Bitcoin price has remained fairly stable over the weekend. It is now trading at $83,039, losing 1.40% over the past 24 hours. The daily trading volume, however, is up 87% at $23.94 billion, reflecting heightened market activity.
MicroStrategy co-founder Michael Saylor continued to defend Bitcoin, calling it more than just an asset. It is, he says, a decentralized financial network that can secure the U.S. economy in the digital age. Meanwhile, in a significant policy move, U.S. President Donald Trump signed an Executive Order on March 7 to establish a Strategic Bitcoin Reserve, signaling the government’s interest in the asset despite ongoing volatility.
While the ultimate fate of Bitcoin remains unclear, the warnings from Schiff signal the risk ahead. Its price could be set for a precipitous drop, challenging its reputation as a safe store of value, if the Nasdaq descends into a deeper bear market.
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