Economist Foresees $115,000 Bitcoin Peak, Followed By Largest Crash Since 1929
January 18 2024 - 1:00PM
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Renowned macroeconomist Henrik Zeberg has set the financial world
abuzz with a stark prognosis on X (formerly Twitter), forecasting a
dramatic surge in the Bitcoin price to a peak of $115,000 to
$150,000. However, this meteoric rise is predicted to find an
abrupt end, caused by a devastating macroeconomic downturn, one
that Zeberg anticipates will be the most severe since the 1929
crash. Why A Recession Will Hit The US In 2024/2025 At the core of
Zeberg’s argument are seven reasons. Zeberg asserts, “Our Business
Cycle has flashed a recession signal in 2023. Leading Indicators
have crashed under our Equilibrium Line. In 80 years of data, the
recession Signal from our Model has NEVER been wrong. No false
signals – ever!” This model, with its unwavering accuracy over
eight decades, forms the bedrock of his grim forecast. Zeberg also
delves into the significance of yield inversion, a well-documented
precursor to economic downturns. Despite the signal’s dismissal by
analysts in 2023 due to impatience, Zeberg emphasizes its
historical reliability, noting, “From the bottom of the Yield
Inversion, we normally see 12-15 months before a recession sets in.
This signal is very much alive!” His remarks underscore a
widespread underestimation of this critical indicator. The
economist further examines the trajectory of US industrial
production, drawing alarming parallels to the period just before
the 2007-08 financial crisis. He observes a similar pattern of
divergence and warns of a strong impending drop in industrial
production, signaling the onset of a recession. Related Reading:
Why Is Bitcoin Price Trading Sideways? 3 Key Factors Zeberg’s
analysis extends to the housing market, where he highlights the
plummeting NAHB index as a significant warning sign. “The bigger
the decline in NAHB – the larger the rise in Unemployment,” he
states, pointing to the direct relationship between housing market
distress and the broader economy. This situation is exacerbated by
rising interest rates, which lead to reduced consumer spending and,
consequently, an economic downturn. Moreover, personal interest
payments are another cornerstone of Zeberg’s argument. He notes the
historical pattern where increases in market rates burden consumers
with higher mortgage and debt payments, ultimately leading to
recessions. “Every rise in rates over the years has caused a
recession, as consumers need to pull back on their Consumption,”
Zeberg cautions, highlighting the lag inherent in the economic
business cycle. Housing affordability, or the lack thereof, is also
a critical component of his analysis. With affordability plummeting
below levels seen before the financial crisis, Zeberg paints a grim
picture of the near future, where a deteriorating unemployment
situation could lead to widespread defaults and a housing market
collapse. Lastly, Zeberg points to the bloated inventory levels of
retailers and companies worldwide. He describes this as a hangover
from the demand hype of 2021-22, driven by stimulus funds that have
since dried up. This mismatch between supply and anticipated
demand, he suggests, is a ticking time bomb for the economy.
Bitcoin: A Mirage Before The Storm In the midst of this dire
economic forecast, Zeberg casts a unique spotlight on Bitcoin. He
predicts a fleeting period of euphoria for the cryptocurrency, with
its value skyrocketing to an all-time high, potentially reaching
between $115,000 and $150,000. He also provocatively states,
“@Peter Schiff: See you at BTC = 100X 1 ounce of Gold.”
@PeterSchiff See you at BTC = 100X 1 ounce of Gold 😉
pic.twitter.com/rRf4MM9qYd — Henrik Zeberg (@HenrikZeberg) January
17, 2024 However, Zeberg cautions that this surge is part of a
broader misleading narrative. “The Soft Landing Narrative is what
will dominate into the top in #Equities #Crypto #BTC,” he
elaborates. This narrative, according to him, is a mirage that will
mislead economists and analysts as they try to rationalize the
‘blow off top,’ a phenomenon they failed to forecast. Related
Reading: Bitcoin Sees Massive Sell-Off From Miners, As Price Holds
Steady The reality, as Zeberg sees it, is starkly different: “Stock
Market and Crypto will SOAR into early 2024. Euphoria will develop.
Everybody will get onto the wrong side of the boat – just as Equity
and Crypto Markets put in a major top. Recession sets in a few
months later in 2024.” In conclusion, Zeberg’s analysis foresees a
major recession, one that he believes is inevitable and imminent.
“The Titanic has already hit the Iceberg – and it will sink,” he
starkly notes, dismissing any interventions from the Fed or any
administration as futile. The question is how Bitcoin might behave
in a recession, something the cryptocurrency has not experienced
since its inception in 2009. Will BTC become a safe haven, or will
it follow the fate of equities, as Zeberg predicts? At press time,
the Bitcoin price continued its sideways trend, trading at $42,392.
Featured image from DALL·E , chart from TradingView.com
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