$100,000 price target if Bitcoin decouples from Nasdaq

A potential decoupling scenario between Bitcoin (BTC) and the Nasdaq Composite could push BTC prices to $100,000 within 24 months, according to Adamant Capital founder Tuur Demeester.

Bitcoin Outperforms Tech Stocks

Demeester described bitcoin's growing market valuation relative to a tech-heavy U.S. stock market index, emphasizing bitcoin's ability to break out every time after a period of strength.

"It could do so again in the next 24 months," he wrote, citing the chart below.

More than a decade after its birth, BTC has risen from just $0.06 to as high as $69,000, according to data tracked by the BraveNewCoin Bitcoin Liquidity Index (BLX).

This equates to a roughly 64.5 million-fold increase in the price of Bitcoin since 2010. In comparison, the Nasdaq has returned nearly 650% over the same period -- from 20.99 on June 22, 2020, to 171.54 on February 18, 2022. As a result, Bitcoin’s market capitalization grew from $28.68 billion on Nasdaq to $755 billion.

Will Bitcoin decouple from tech stocks again?

Bitcoin’s history thus far has witnessed multiple periods of strong correlation with U.S. tech stocks. For example, earlier this month, the cryptocurrency’s correlation efficiency with Nasdaq reached 0.73, almost approaching the five-year high of 0.74 in 2020, according to Bloomberg data.

The price of BTC fell from a record high of $69,000 to below $33,000 last month amid a sell-off in the broader risk-on market. At the same time, the Federal Reserve decided to sharply increase its benchmark interest rate, which hit a 40-year high in January 2022, in response to rising consumer prices.

Matthew Sigel, director of digital asset research at VanEck Associates, expects bitcoin to fall along with the Nasdaq and other U.S. stock indexes, albeit more severely. However, he noted that Bitcoin’s volatility has been on a downward trend in recent years. In contrast, the Nasdaq 100 has a higher standard deviation swing than its five-year average.

The outlook shows that Bitcoin has gradually improved as a reliable safe-haven asset against rising inflation. As a result, its correlation with risky assets such as technology stocks may decline.

“It’s relevant at the moment,” James Butterfill, research director at data analytics firm CoinShares, told Bloomberg, adding that cryptocurrencies are “very sensitive to concerns about rising interest rates.” He pointed out:

“But what happens if there’s a policy mistake, like the Fed raising rates too much, or not enough, and you have an inflation problem? That could actually be more supportive for bitcoin than it is for stocks. effect will be diminished.”

Additionally, Joey Krug, CEO of cryptocurrency-focused hedge fund Pantera Capital, expects the decoupling to happen “within the next few weeks,” noting that “cryptocurrencies will start trading on their own.”

BTC price target is $100,000

Demeester pointed to Bitcoin’s ability to consolidate at $50,000, despite pressure from its Nasdaq correlation, as one of the main reasons why it could sprint toward $100,000.

This price target is in line with Goldman's expectations in early 2022. The investment giant, which manages $1.2 trillion worth of assets globally, noted that bitcoin could be worth $100,000 if it took some of the market share of traditional safe-haven gold. Today, Bitcoin’s market capitalization is only slightly less than 6% of gold’s.