Investor John Hussman believes we are on the verge of a collapse of the stock markets. He argues that even a 50-65%sodium market crash in this cycle is “somewhat optimistic”. What would be the implications of such a break-in for Bitcoin?
This month, the U.S. economy experienced the longest expansion phase in its history. This is now officially the longest amount of time that has passed, your economy without a recession.
That is a reason to celebrate, however, should give us such a fact is also a cause for concern: Is the current growth sustainable?
Some financial analysts suggest that we could experience a serious correction and, what is worse, a complete extinction of almost all the previous gains.
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An ominous forecast for the early 2020s
Investor John Hussman says, we have every reason to worry. He firmly believes that the portfolio yields “are heading for the worst 12-year return in the history”.
He points to the weakening of the internal metrics within the market and predicts that we could see at best a 50-65% drop in the stock market, which may have an impact on Bitcoin.
He strikes an alarming tone in terms of what he thinks is the future fate of the world markets. Hussman, we could see a Crash of the 1929 matches or even goes beyond them.
“At current market levels, we expect the S&P 500 negative total returns over the next 12-year period,” says Hussman to Business Insider. He predicts yields of a decade, with negative equity.
Hussman claimed that his measures would successfully draw attention to previous crashes, including the crash of technology stocks in the early 2000s. In April 2007, he had claimed that the S&P would lose around -40%, and during the subsequent collapse at the end of 2007/08 to -55% fall.
He could be still on the right track.
What do Bitcoin?
Often it was written that Bitcoin is a hedge against risks and a possible economic downturn. However, Bitcoin has experienced has never been a recession and there is no reason to really believe that he will ascend to higher heights when it comes to.
Tom Lee Fund was about Money, said on CNBC: Bitcoin tend to follow the S&P500. In fact, it seems to be clear: the higher the shares rise, the higher Bitcoin will rise. The best years for the S&P500 were undoubtedly the best years for Bitcoin.
If past Trends can give a view, a like Hussman predicted the collapse of the stock market is likely to lead to a slump in the Bitcoin price.
This is maybe not what many want to hear in the crypto industry, but it is something that we should be on the way to the new decade to consider.