A much-followed crypto analyst warns that major technology stocks and digital assets could underperform in the coming years.
In a new strategy session, DataDash presents Nicholas Merten tells According to its 512,000 YouTube subscribers, tech giants and crypto assets, including Bitcoin (BTC), could see moderate gains in the coming years.
“One of the worst performing assets in the coming years could be cryptocurrencies and the FAANG stocks, or the big tech companies. I’m talking about Facebook, Amazon, Netflix, Google, Microsoft, Apple, the huge tech companies that have made monstrous profits and outperformed the broader stock market…
I’m not just talking about Bitcoin, but the broader altcoin space and a whole that used to yield insane multiples.”
Merten’s statement is based on declining market liquidity as a result of, among other things, the aggressive policy of the Federal Reserve.
“We are in an environment where liquidity is declining. We are in an environment where crypto is essentially struggling, and more importantly, to find its value proposition after making huge gains. And furthermore, to accelerate from its current market cap of $1 trillion, crypto will have a much harder time reaching $10 trillion than it did when it had a market cap of, say, $100 billion. moving towards a trillion dollars.
It’s important to understand that much more liquidity is needed, that much more fundamental value creation is needed to drive these bull markets. And as we emphasized here, we’re dealing with liquidity working against us here. The Fed alone pulls back its balance by about $100 billion every month.
Global liquidity seems poised for a new low and Fed Funds rates are starting to climb to the highest level since 2007, if we’re talking about the United States and other central banks as a whole, and similar levels we saw in the early 1990s. or at the beginning of the acceleration in the 1970s, to curb inflation.”
Bitcoin is trading at $25,841 at the time of writing, up 1.05% over the past 24 hours.
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