Nvidia Tumbles, But Here's Why Bitcoin Could Gain

If Trump’s investiture only gave Bitcoin a brief spike to $109,000, other shocks could well propel it even higher. Among them, the spectacular decline of Nvidia and the enthusiasm of crypto giants for IPOs. Between inflated valuations and well-oiled financial strategies, experts already see the flagship crypto resuming its ascent. But beware, a few bumps could precede the celebration…

Nvidia in free fall: a springboard for Bitcoin?

On January 27, Nvidia achieved a feat it would have preferred to avoid: wiping out $600 billion from its valuation in a single day, an absolute record of heavy drop on Wall Street. The cause? DeepSeek, a Chinese Artificial Intelligence firm, which unveiled a model rivaling ChatGPT, sowing panic in the semiconductor market.

But where some lament, Bitcoin could well be laughing. Less investment in AI means less inflation, and therefore, a more lenient Fed. An ideal situation for risky assets like BTC, which could see its price boosted by capital flight out of tech.

As 10x Research points out, the decline in AI spending leaves more room for stock buybacks and calms inflationary fervor, opening the door to a rally in the flagship crypto.

Raoul Pal, meanwhile, tempers enthusiasm: Bitcoin is expected to hit a local peak of $110,000 before retreating below $70,000.

https://twitter.com/RaoulGMI/status/1862521182446109032

“There have been many imitations of this chart with poor phasing. Here’s the original updated by Global Macro Investor. You’re welcome.”

A warning not to be taken lightly, even if, for many, this is just a false flat before a new ascent.

The crypto market under the drip of IPOs

Besides Nvidia, another factor could well push Bitcoin to the top: IPOs (Initial Coin Offerings) from crypto market giants. No less than ten large firms plan to go public in 2025, with a combined valuation nearing $100 billion.

And when there’s a grand introduction, it means BTC prices artificially maintained in altitude.

• Private valuation before IPO: about $73.9 billion;
• Expected valuation after IPO: between $100 and $150 billion;
• Potential increase in valuations: from 50% to 100%;
• Implicit goal: maintain Bitcoin at record levels to attract investors.

This is not the first time: in 2021, before Coinbase’s IPO, intense efforts were made to boost BTC prices. Once again, history seems to repeat itself, with a “clear incentive to keep Bitcoin expensive”, according to 10x Research.

But beware of excesses: with U.S. debt reaching $36 trillion, liquidity could contract, and the market could then experience a temporary correction below $70,000 before a recovery.

No panic! The recent drop in Bitcoin has nothing alarming, say experts. The liquidation movements that have shaken the market follow a classic pattern of volatility. And if history repeats itself, after each correction, BTC always ends up bouncing back stronger.