Table of Contents
- 1 Bitcoin: Nouriel Roubini’s warning
- 2 Small caps are on alert in South Korea
- 3 **Given Dr. Roubini’s stance on Bitcoin’s volatility and speculative nature, what indicators could suggest that the current rally is driven by more than just “fear of missing out” and may be sustainable in the long term?**
After profit-taking, Bitcoin began to march towards $100,000 again. Altcoins such as Cardano, Stellar and Litcoin are also in great shape, continuing to outperform. Investors are waiting for the new President of the United States, Donald Trump, to impose a regulatory framework that will reverse the Biden administration’s crackdown and definitively revive the development of the cryptographic sector.
After the promises made during the electoral campaign, concrete steps are now needed. The first were the Gary Gensler’s resignation as head of the Securities and Exchange Commissionconsidered the number one enemy of cryptocurrencies. This was enough to push Bitcoin just shy of the fateful threshold of $100,000. According to those in the know, the main candidate for the new president of the SEC is Paul Atkinsconsidered crypto-friendly. Potential challengers from the Commodity Futures Trading Commission (CFTC) – the derivatives regulator – are also all in favor of the cryptocurrency market.
However, Trump must follow up on his announcements to create a strategic reserve of Bitcoin in the United States and to make the country the recipient of mining of the remaining coins. In the meantime, there is discussion of creating a post dedicated to digital asset policy in the White House.
Bitcoin: Nouriel Roubini’s warning
Investors in this period are excited at the idea of the beginning of a new historical phase for Bitcoin and other cryptocurrencies, with recognition at an institutional level as never seen before. “Once some leverage has been exhausted and short-term buyers have finished taking profits, we believe Bitcoin can find a solid support base and make another attempt to break above the $100,000 level,” Alex Thorn, head of corporate research at Galaxy Digital LP, wrote in a note.
However, there are those who still see very high risks. Among these Nouriel Roubini, the great economist who predicted the 2008 financial crisis. “Bitcoin is highly volatile. If you want to preserve wealth rather than high volatility, you have to stay away from these types of assets,” he said in an interview yesterday . An alarming signal has arrived in recent days from some “short” cryptocurrency ETFs which have recorded record daily inflows.
Small caps are on alert in South Korea
Meanwhile, Bitcoin’s powerful rally is taking off worries about South Korea’s small capswhich on the stock market have slipped by around 8% this year. According to analysts, the poor performance of these shares is motivated by the fact that small investors are dumping the stocks to focus on Bitcoin. “Because the Kosdaq index is doing badly, people are heading to the virtual currency market,” said Ahn Hyunsang, CEO of the Korea Investment Research Institute, a stock consultancy firm.
In reality, spot Bitcoin ETFs are prohibited in Korea and one of the reasons why regulators are avoiding approving them is due to the fear of a transfer of funds from the stock markets. However, investors have bypassed the problem by focusing on funds that reproduce Bitcoin futures or by purchasing MicroStrategy shares, the company led by Michael Saylor that has bought up Bitcoin.
**Given Dr. Roubini’s stance on Bitcoin’s volatility and speculative nature, what indicators could suggest that the current rally is driven by more than just “fear of missing out” and may be sustainable in the long term?**
## Bitcoin on a Breakout, but is $100,000 Sustainable?
**Introduction**
Today, we’ll explore the recent surge in Bitcoin’s price, fueled by the potential for a more crypto-friendly regulatory environment in the US. Joining us are **Alex Thorn**, Head of Corporate Research at Galaxy Digital LP, and **Dr. Nouriel Roubini**, a renowned economist and global macro expert, known for his accurate prediction of the 2008 financial crisis.
**Setting the Stage: A Coming Regulatory Shift in the US?**
The ousting of Gary Gensler from the SEC and the potential appointment of crypto-friendly Paul Atkins have ignited investor optimism. Will the US embrace Bitcoin and cryptocurrencies under Trump’s leadership?
**### Alex Thorn on Bitcoin’s Trajectory:**
>
>”Bitcoin’s recent rally, exceeding $98,000, reflects a growing confidence in the future of digital assets. The potential for a regulatory shift in the US, alongside Trump’s pro-crypto announcements, creates a positive feedback loop. While some profit taking is expected, we believe Bitcoin has a strong foundation to push beyond $100,000 and reach new highs.”
**### Dr. Nouriel Roubini on the Dangers of Bitcoin:**
>
>”I remain deeply skeptical about Bitcoin’s long-term value. It’s inherently volatile, speculative, and unsuitable for wealth preservation. While the current rally is fueled by hype and regulatory optimism, I think this is unsustainable. We could see a significant correction once the initial euphoria fades.”
**The Impact of Regulatory Clarity on Institutional Adoption?**
With increased clarity on crypto regulations, institutional investors are becoming more engaged with Bitcoin and other digital assets. What are the potential implications for the crypto market as a whole?
**### Alex Thorn on Institutional Adoption:**
>“The prospect of regulatory certainty is a significant driver for institutional adoption. A favorable framework would provide the necessary safeguards and reassurance for large institutions to enter the crypto market, attracting substantial capital inflows.”
**### Dr. Nouriel Roubini on The Speculative Bubble:**
>
>”While institutional interest is growing, much of the recent surge is driven by fear of missing out (FOMO). Institutional investors need to thoroughly assess the risks before allocating significant capital to an asset class as volatile as Bitcoin. Blindly following the crowd could lead to significant losses.”
**Small Caps vs. Crypto: A Tale of Two Markets**
The strong rally in Bitcoin has coincided with a decline in South Korea’s small-cap stocks. Are investors shifting their focus from traditional markets to cryptocurrencies?
**### Alex Thorn on the Global Shift:**
>“The accessibility and perceived growth potential of cryptocurrencies are attracting a diverse range of investors. While this may lead to temporary shifts in capital allocation, the long-term role of cryptocurrencies within global portfolios is still evolving.”
**### Dr. Nouriel Roubini on the Disconnect:**
>
>”The disconnect between the booming crypto market and the struggling stock market is a worrying sign. It reflects a growing disconnect from
economic fundamentals and suggests a degree of irrational exuberance.”
**
**Concluding Remarks:**
Bitcoin’s journey toward $100,000 is
fuelled by both cautious optimism and inherent risk. While a
favorable regulatory environment could accelerate institutional adoption, the volatility and speculative nature of Bitcoin should not be overlooked. Only time will tell if this bull run is sustainable or another fleeting frenzy in the world of cryptocurrencies.
