Broadly adopted crypto analyst Benjamin Cowen is figuring out a worst-case state of affairs for the crypto markets as costs spiral downward.
In a brand new technique session, Cowen tells his 784,000 YouTube subscribers that the crypto markets might surrender tons of of billions of {dollars} in a correction just like the dot-com collapse.
“There are a number of similarities between the tech inventory collapse again within the dot-com period and the crypto collapse that we’re seeing immediately.”
Cowen seems on the efficiency of the Nasdaq in the course of the dot-com period and attracts parallels to immediately’s crypto markets. He makes use of the market rally and decline percentages from the dot-com period to point the place the whole market cap for Bitcoin and different cryptos could possibly be heading.
In keeping with the analyst, the whole market cap of all crypto property could also be able the place it witnesses another capitulation part, just like what occurred to the Nasdaq in 2022 when it crashed by about 30% earlier than bottoming out.
“The place would it not put [the total crypto market cap] if we went 30% decrease under the prior low? It could put the whole market cap at round $500 billion, which represents a large correction from the present ranges. That’s 30% under the prior low. From the present ranges, that might signify one other 40% to 50% correction. And once more, we all know that these percentages are topic to slight modifications prefer it’s not going to be actual. So perhaps it could possibly be 40% down from right here if it’s going to comply with it. Or perhaps it could possibly be 50% down and get you nearer to $400 billion…
I feel the worst-case state of affairs for crypto can be someplace round a $400 billion to $500 billion market cap for your complete asset class.”
A decline to a $500 billion market cap would evaporate greater than $460 billion in cryptocurrencies. The whole market cap at time of writing is $966 billion.
Cowen additionally says that the dot-com crash from its peak occurred over a two-and-a-half-year interval when the Nasdaq dropped by a complete of 83%. He says an identical fall from the height of the crypto markets would additionally deliver the whole market cap all the way down to the $400 billion to $500 billion vary.
The crypto analyst notes that he’s figuring out a worst-case state of affairs, and it’s nonetheless potential the underside is already in.
“There’s all the time an opportunity that the underside is in, and that it doesn’t should play out within the worst-case state of affairs.”
I
Do not Miss a Beat – Subscribe to get crypto electronic mail alerts delivered on to your inbox
Verify Value Motion
Observe us on Twitter, Facebook and Telegram
Surf The Every day Hodl Combine
 
Disclaimer: Opinions expressed at The Every day Hodl usually are not funding recommendation. Traders ought to do their due diligence earlier than making any high-risk investments in Bitcoin, cryptocurrency or digital property. Please be suggested that your transfers and trades are at your individual danger, and any loses you might incur are your duty. The Every day Hodl doesn’t suggest the shopping for or promoting of any cryptocurrencies or digital property, neither is The Every day Hodl an funding advisor. Please be aware that The Every day Hodl participates in internet online affiliate marketing.
Generated Picture: Midjourney
