Markets
Cryptocurrencies Wobble as Nvidia Loses $500 Billion: ‘Momentum-Hype Trade Is Likely Over’ – DL News
- Nvidia may have passed.
- That could trigger a tech sell-off, analysts say.
- However, it could also give cryptocurrencies an opportunity to regain the upper hand.
Cryptocurrency investors aren’t selling their stocks just because of Mt. Gox Fears — are also addressing the idea that $3 trillion chipmaker Nvidia may have crossed the line.
This 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 more difficult for the broader market to continue making new highs over the summer.”
Bitcoin has fallen 6% since Nvidia hit a high on June 20.
Ether, meanwhile, tumbled 4%, even as analysts expect Ethereum spot exchange-traded funds they will probably be launched within the next seven days.
Noelle Acheson, former head of market insights for Genesis Global Trading, agrees.
“When the stock market turns, we are likely to see panic selling in the cryptocurrency space as well, for no fundamental reason other than emotion,” he said. he wrote in his newsletter “Crypto Is Macro Now.” “Maybe the need to raise money for margin calls with whatever you can.”
Acheson noted that Nvidia has shaved $500 billion from its market capitalization, a figure that exceeds the gross domestic product of many countries, even wealthy ones, including Austria.
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“Let it sink in,” he said.
But not everyone is pessimistic. Ram Ahluwalia, CEO of Lumida Wealth, a cryptocurrency investment advisor, argued that cryptocurrencies could benefit from Nvidia no longer monopolizing the scene.
“The fast money capital that would normally flow into cryptocurrencies is going into Nvidia,” he said. published on X two weeks ago.
In other words, as Nvidia continued to make new highs, market participants looking for quick profits focused on stocks and other AI companies.
Ahluwalia noted that GameStop’s rally in January 2021 had the same effect. While the stock rose 2,065%, Bitcoin consolidated and ended the month at the same price it started.
So Nvidia’s decline could be an opportunity for Bitcoin and Ethereum to regain market attention, if that’s possible.
“Cryptocurrencies Need to Come to the Forefront Now,” Ahluwalia She said Yesterday.