HomeBitcoinStifel predicts an upcoming S&P 500 correction based on Bitcoin's recent decline

Stifel predicts an upcoming S&P 500 correction based on Bitcoin’s recent decline

-


Bitcoin’s Recent Weakness Could Signal Upcoming Stock Correction, Says Stifel’s Chief Equity Analyst

Bitcoin’s recent weakness could be signaling an upcoming correction in stocks, according to Stifel’s chief equity analyst Barry Bannister. With Bitcoin struggling to hold the $70,000 mark after reaching its all-time high in March, Bannister believes that the S & P 500 could be in for a summer correction.

Historically, the S & P 500 averages flat for about six months after bitcoin peaks, and past cycles point to a topping in the benchmark stock index. Bannister predicts that the S & P 500 could fall to 4,750, a roughly 13% drop from current levels, by the end of the summer. High beta tech stocks like Nvidia are especially vulnerable heading into the third quarter, according to Bannister.

Many see bitcoin as “digital gold,” but Bannister views it as a speculative instrument driven by excess dollar liquidity. He believes that the market is currently in an asset bubble, fueled by the injection of trillions of dollars of rescue money into the economy during the Covid-19 crisis.

Expectations for a summer correction aren’t based on bitcoin alone, however. Stifel expects “a case of moderate stagflation” to tighten financial conditions and expose the S & P’s high price-earnings ratio. Bannister also warns that investors may be in a “full-fledged bubble/mania mode which looks past our concerns.”

Overall, Bannister’s analysis suggests that the S & P 500 could experience a significant correction in the coming months. Investors will need to carefully monitor market trends and be prepared for potential volatility in the stock market.

LATEST POSTS

FTX CEO exploring alternative options after Binance deal falls through in the crypto industry

FTX CEO Sam Bankman-Fried Explores Options After Binance Deal Collapse FTX CEO Sam Bankman-Fried Faces Uncertainty After Binance Deal Collapse In a shocking turn of events,...

5 Stocks with Bitcoin Exposure to Consider During Recent Market Turmoil

Analysis of Bitcoin Market and Top Picks for 2024 The cryptocurrency market took a hit in April after a strong rally in the previous 15...

Bitcoin Blockchain Reaches One Billion Transactions Milestone

Bitcoin Blockchain Reaches One-Billion Transaction Milestone in 15 Years The Bitcoin blockchain has achieved a significant milestone by reaching one billion transactions after 15 years...

The SEC Continues to Sue Crypto Companies

SEC Sends Wells Notice to Robinhood for Alleged Securities Violations Robinhood, the popular fintech firm known for its commission-free trading platform, is now facing legal...

Most Popular