Bitcoin Faces a Steep Decline if the Nasdaq Downturn Deepens

Bitcoin faces a steep decline if the Nasdaq downturn deepens, warns Peter Schiff, predicting a wave of panic selling that could shake investor confidence and destabilize markets.

The rout in the Nasdaq could spell a steep decline for bitcoin, warns economist Peter Schiff, as he predicts a wave of panic selling that could shake investor confidence and destabilize markets.

Unwinding the Correlation: A 12% Setback in the Tech Index

suggesting that a prolonged downturn in the Nasdaq could severely impact the cryptocurrency’s price. Schiff highlighted current market conditions in a post on social media platform X on Friday.

The NASDAQ is down 12%. If this correction turns out to be a bear market, and the correlation where a 12% decline in the NASDAQ equates to a 24% decline in bitcoin holds, when the NASDAQ is down 20%, bitcoin will be about $65K.

However, he cautioned that bear markets typically bring much larger declines.

If the NASDAQ goes into a bear market, history shows that the decline will be much larger.

The economist projected that if the Nasdaq experiences a substantial decline, bitcoin could face an even steeper collapse.

If this bear market bottoms with just a 40% decline, that would put bitcoin at about $20K. However, my bet would be that a drop of that magnitude would accelerate bitcoin’s collapse to much lower levels.

Schiff also noted that gold has been moving inversely to the Nasdaq, gaining 13% since the stock index's peak in December 2023. He suggested that if this trend continues and the U.S. stock market plunges, gold could rise above $3,800, especially if the greenback weakens.

Schiff has long argued that gold is a better hedge against economic uncertainty than bitcoin, which he predicts will lose more of its credibility if it continues to decline while gold rises. He added that such a divergence between gold and bitcoin would further damage bitcoin’s credibility.

Given that such a divergence will likely end the pretense that bitcoin is a store of value similar to gold, there will clearly be no justification for the U.S. government or any state government to keep any bitcoin in a strategic reserve.

Schiff further predicted that investors would likely sell their bitcoin exchange-traded fund (ETF) holdings, triggering widespread selling.

There will also be no reason for ETF investors to keep holding their positions either. With all that selling, it will be impossible for MSTR [Microstrategy] to sell enough bitcoin to avoid bankruptcy.

However, Schiff admitted that his explanation was not a “serious analysis.” He clarified:

It’s not meant to be. Just pointing something out. If the NASDAQ drops 20%, I expect bitcoin to be lower than $65K.

Despite the downturn, many bitcoin price predictions remain optimistic, driven by industry leaders and regulatory developments. Tim Draper maintains his $250,000 forecast for 2025, while Tom Lee expects bitcoin to be the year’s top-performing asset. Standard Chartered projects a $500,000 valuation, and Michael Saylor envisions $13 million by 2045. Former Binance CEO Changpeng Zhao (CZ) and Abra CEO Bill Barhydt recently highlighted bitcoin’s adoption and resilience. The White House Crypto Summit reinforced market confidence, with President Trump pledging support and proposing a strategic bitcoin reserve, signaling a shift toward favorable regulation.