The cryptocurrency market continues to struggle due to an unfavorable economic outlook. Bitcoin (BTC), the largest cryptocurrency, is down over 50% from its all-time high. BTC has fallen close to 2% in the last 24 hours and is currently trading at $19,141.
However, one expert reveals that the crypto market, including Bitcoin, is set to soar.
Why Bitcoin (BTC) Will Skyrocket
Professor Jeremy Siegel of the University of Pennsylvania believes that the stock market is currently undervalued and will soar 20-30% in the next year. He believes that the Federal Reserve is sapping any enthusiasm from the market.
The crypto market is strongly correlated with the general stock market. Bitcoin, in particular, is strongly correlated with the tech-oriented NASDAQ-100. According to Coinbase Research, crypto assets have a beta of 2 in relation to the general stock market. In simpler words, crypto will have twice as much price movement as the broader market. In this manner, Bitcoin behaves similarly to technology stocks or oil.
Coinbase research also highlights how the crypto winter was mostly about the macroeconomic outlook rather than the crypto industry.
The Federal Reserve maintaining a hawkish stance and raising interest rates caused a massive selloff in the crypto market. However, Fed’s stance has also brought about the risk of recession. According to Siegel, the risk of recession outweighs the cost of inflation in the economy.
He also highlights that if the Fed follows through on long-term trends, the Fed will pivot before long. According to him, the central bank should give time for the interest rate hike to work.
Siegel has always been bullish on the stock market. However, he is not the only one that believes that the crypto market will skyrocket in the long run. As CoinGape previously reported, many whales were going long on Bitcoin.
Will The Fed Pivot
Bitcoin will rally if the Federal Reserve halts rate hikes or pivots. While Siegel believes that the Fed will pivot soon, his opinion is in contrast with the opinion of the central bank. In the FOMC meeting, the Fed specifically stated that the cost of doing too little to curb inflation is much higher than the cost of doing too much.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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