Bitcoin Can Drop To $20,000 If Nasdaq Falls Into Bear Market, Says Peter Schiff

Bitcoin could face significant challenges if the Nasdaq enters a bear market, according to Peter Schiff, an American Stockbroker and critic of cryptocurrencies. As a reflection of its tech-driven tendency, Bitcoin frequently tracks the Nasdaq's movement.

Bitcoin is currently trading at $83,075.04 on March 18, and saw a slight 0.28 per cent decrease in price, according to CoinMarketCap data. The price has already seen a decline from its all-time high of $109,200 on January 20, and the continued volatility in the broader market could further impact Bitcoin’s performance.

In his tweet, Peter Schiff stated, “The NASDAQ is down 12 per cent. If this correction turns into a bear market, a 12 per cent decline in the NASDAQ would likely result in a 24 per cent drop in Bitcoin. If the NASDAQ falls 20 per cent, Bitcoin could be about $65,000.”

However, Schiff emphasized that if the NASDAQ enters a bear market, history shows the decline would likely be much steeper. After the Dot-com bubble burst, the NASDAQ fell nearly 80 per cent. During the 2008 Global Financial Crisis (GFC), it dropped 55 per cent, and the 2020 COVID crash saw a 30 per cent drop. The average of those three bear markets is a 55 per cent decline. Peter Schiff also mentioned, “If this bear market bottoms with just a 40 per cent decline, that would put Bitcoin at about $20K. However, my bet would be that a drop of that magnitude would accelerate Bitcoin's collapse to much lower levels.”

Schiff’s point is that Bitcoin might experience a sharper, more dramatic loss in value if the market conditions worsen.

Schiff pointed out the divergence between Bitcoin and gold. Since December 2023, as the NASDAQ has fallen, gold has risen by 13 per cent. Schiff predicts that a 40 per cent drop in the NASDAQ could push gold above $3,800, but he suggests that if the bear market coincides with a significant decline in the U.S. dollar, gold could rise much higher. Even at $3,800 gold and $20,000 Bitcoin, Schiff notes Bitcoin would be down over 85 per cent in terms of gold. This divergence, he argues, would likely end the pretence that Bitcoin is a store of value, removing any justification for the U.S. government or states to hold Bitcoin in a Strategic Reserve.

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