Nvidia, a leader in technology and AI, saw its stock drop by 17% in one day, impacting the tech sector and cryptocurrencies significantly.
Impact of Nvidia's Stock Plunge
The US tech sector lost $600 billion in market value due to Nvidia's stock decline. This event caused Bitcoin to drop below $100,000 temporarily, affecting other cryptocurrencies as well. However, many experts remain optimistic about the long-term prospects of cryptocurrencies.
Global Liquidity Bolsters Bitcoin
The market plunge has not threatened Bitcoin due to the support of global liquidity. Bitcoin is not closely correlated with the US tech sector and is backed by a $38 trillion global liquidity pool. According to Markus Thielen, CEO of 10x Research, Bitcoin's direct link to the US dollar makes it resilient to short-term market shifts.
Rise of Bitcoin ETFs and Rate Cut Expectations
Bitcoin ETFs have seen a significant rebound following the December 2024 CPI data release. The Federal Reserve's statement on possible rate cuts in 2025 also boosted investor confidence. Consequently, there were five days of ETF inflows after a long period of inactivity. Thielen stresses that the Federal Reserve policy and global liquidity are the main factors influencing Bitcoin's price.
Despite shocks in the tech sector, Bitcoin continues to gain support from global liquidity and investments in ETFs. Experts believe Bitcoin prices might reach $130,000 to $190,000 in the current bull market cycle.
