Crypto investors aren’t just dumping their holdings because of Mt. Gox fears — they’re also contending with the idea that $3 trillion chip maker Nvidia may have topped.
That could be tumultuous for tech stocks in general, according to Markets.com analyst Neil Wilson.
“The momentum-hype trade is probably over,” he said in a note to clients. A consolidation of portfolios “will make it materially harder for the broader market to keep making fresh highs over the summer.”
Bitcoin is down 6% since Nvidia topped on June 20.
Ether, meanwhile, has slumped 4%, even though analysts predict that spot Ethereum exchange-traded funds are likely to launch within the next seven days.
Noelle Acheson, former head of market insights for Genesis Global Trading, concurred.
“When the stock market turns, we are likely to see panic selling in crypto as well, for no fundamental reason other than emotion,” she wrote in her “Crypto Is Macro Now” newsletter. “Perhaps the need to raise cash for margin calls with whatever one can.”
Acheson noted that Nvidia had shaved off $500 billion from its market capitalisation — an amount that tops the gross domestic product of many countries, even rich ones including Austria.
“Let that sink in,” she said.
But not everyone is bearish. Ram Ahluwalia, CEO of crypto investment advisor Lumida Wealth, argued that crypto could benefit from Nvidia no longer hogging the spotlight.
“Fast money capital that would ordinarily flow into crypto is going into Nvidia,” he posted on X two weeks ago.
In other words, because Nvidia kept making fresh highs, market participants looking for quick profits were focusing on the stock and other AI companies.
Ahluwalia noted that GameStop’s rally in January 2021 had had the same effect. While the stock soared 2,065%, Bitcoin consolidated and finished the month at the same price it started.
So Nvidia’s drop could be an opportunity for Bitcoin and Ethereum to grab the market’s attention again — if they can.
“Crypto needs to come into the foreground now,” Ahluwalia said yesterday.