Bitcoin may plunge below $65K amid Nasdaq bear market

Economist Peter Schiff has issued a stark warning about Bitcoin's (CRYPTO:BTC) vulnerability to a potential Nasdaq bear market, predicting that the cryptocurrency could face significant losses if the stock market downturn deepens.

Schiff shared his concerns on March 16, suggesting that Bitcoin’s price could drop below $65,000 if the Nasdaq experiences a 20% decline.

Schiff pointed to historical patterns where bear markets in the Nasdaq have led to larger declines.

He referenced past financial crises, including the Dot-com bubble and the 2008 recession, to illustrate how severe stock market downturns can destabilise speculative assets like Bitcoin.

“If the Nasdaq goes into a bear market, history shows that the decline will be much larger,” Schiff stated.

He further elaborated that if the Nasdaq’s losses reach 40%, Bitcoin could collapse to $20,000 or lower.

Schiff argued that such a scenario would trigger panic selling among investors, undermining Bitcoin’s credibility as a store of value.

He emphasised that gold has performed inversely to the Nasdaq, gaining 13% since December 2023, and predicted that gold could surpass $3,800 if the stock market plunges further.

Schiff also criticised Bitcoin’s status as an inflation hedge compared to gold, claiming it lacks historical resilience.

He warned that widespread selling of Bitcoin exchange-traded funds (ETFs) could exacerbate its price decline.

“There will also be no reason for ETF investors to keep holding their positions either,” he said, adding that companies like MicroStrategy might struggle to avoid bankruptcy amid such conditions.

Despite Schiff’s bearish outlook, other industry leaders remain optimistic about Bitcoin’s future.

Tim Draper maintains his $250,000 price prediction for 2025, while Standard Chartered projects a valuation of $500,000.

Regulatory developments and increasing adoption continue to fuel bullish sentiment among some investors.

The debate over Bitcoin’s role as an inflation hedge or speculative asset persists.

As Schiff noted, its correlation with risk assets like tech stocks leaves its future uncertain in volatile markets.

However, contrasting views from other analysts highlight the cryptocurrency’s resilience and potential for long-term growth. 

At the time of reporting, the Bitcoin (BTC) price was $83,123.26.