While Bitcoin‘s price continues to rise steadily, some market analysts, like Capo, expect a downturn. Amidst this, market expert Gary Shilling’s comments stand out. Despite the market’s anticipation for a spot Bitcoin ETF approval, which is expected to drive prices higher, Shilling predicts a disastrous outcome due to treasury fluctuations in crypto, stocks, and other assets, warning of painful times ahead.
Shilling, a former Merrill Lynch economist, foresees the biggest bond market fluctuation since the dotcom and 2008 financial crises. He believes that the market’s peak, fueled by individual investor enthusiasm, signals an impending major crash. He warns that the recent extreme financial speculation will definitely end with significant price drops and substantial losses for speculators, with signs that the end is near increasing.
He also views the recent rise in commercial real estate securities with skepticism due to credit tightness in the office space market. Shilling suggests that a breakdown here could drag down the rest of the market, and that the fight against inflation could intensify on the employment front, leading to significant job losses.
The analyst also remarks that areas like artificial intelligence, currently seen as “passing fads,” may only see expected growth figures if they survive the impending destruction.
Shilling compares Nvidia, Tesla, and other tech giants to Kodak, Polaroid, and Xerox, which soared in the 1930s but suffered heavy losses during the stagnation of the 1970s. He advises investors to divest stocks and take short positions against cryptocurrencies this year. However, it’s worth noting that Shilling had made similar doomsday predictions before the 2022 crash, which could mean he might be wrong again.
ServiceNow CFO Gina Mastantuono and Academy Sports+ CEO Carl Ford have expressed concerns about ongoing uncertainty and economic pressure inevitably leading to a recession. Since stocks typically underperform during recessions and cryptocurrencies have been highly correlated with the S&P 500, this could spell negative outcomes for crypto as well. It’s important to remember that major companies anticipated a recession at the start of 2022 and made significant staff reductions accordingly.