- Nvidia’s stock decline triggered a $600 billion loss in the U.S. tech sector, impacting crypto markets.
- Bitcoin’s price remains influenced by global liquidity, not tech market instability.
- Analysts predict Bitcoin could reach $130,000–$190,000 in the current bull market cycle.
The tech stock market plunged with a $600 billion loss in market value and Nvidia was at the heart of it. Nvidia, a company that is at the vanguard of the technology industry and has been ranked high in AI and computing as a recent example, saw the value of its stock plummet by 17% in one day. This eruptive situation also affected the crypto market, with Bitcoin momentarily dropping below $100,000, and a negative impact on all other coins.
Nonetheless, experts are still quite bullish on the cryptocurrency, at least in the longer term. The cryptocurrency sub-sector devoted to artificial intelligence also fell sharply, dropping by 12% due to the ongoing market volatility. Such trends were noted by BitMEX co-founder Arthur Hayes, who stated that cryptocurrency has become a new form of a global option for investors trying to diversify their portfolios amid the increasing instability of the US market.
Global Liquidity Bolsters Bitcoin’s Strength
The latest market turmoil has not threatened the base of Bitcoin as global liquidity still sustains the price of Bitcoin. Bitcoin is not closely correlated with the US tech sector and has been fueled by a $38tn global pool of liquidity, according to Markus Thielen, CEO of 10x Research.
Thielen also noted that Bitcoin is tied to the U.S. dollar, whereas more assets are funneled toward the U.S., a part of that flows into Bitcoin. This comes in the wake of Wall Street-backed Bitcoin ETFs, which have also helped to reduce the asset’s volatility.
Bitcoin ETFs on the Rise as Market Waits for Rate Cuts
The Bitcoin ETFs have also seen a significant rebound, especially after the December 2024 Consumer Price Index (CPI) data release. The statement made by the Federal Reserve Governor Christopher Waller on the possible rate cuts in 2025 also increased investors’ confidence. ETF inflows ramped up and we saw five days of buying after a long period of no activity.
Thielen stressed that the Federal Reserve policy and global liquidity are what mostly influence Bitcoin price rather than short-term fluctuations. According to him, Bitcoin prices might hit $130,000 to $190,000 in the current bull market cycle due to high inflows from ETFs and investors’ confidence.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
