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Bitcoin Price Conquers $12,000 But at Risk of Pull Back in the Current Stock Market Bubble Territory

While the tech sector and the Fed injections have led the US markets to rally higher, markets around the world have seen a similar trend, while the global economic recovery picks up its pace.

Stocks have rallied in the past weeks, while the Dow Jones Industrial Average (DJIA) rose 6.7 percent.

According to Holger Zschaepitz, the global stock market has reached a “bubble territory,” as shown by the Buffett Indicator. The Buffett Indicator shows a fair valuation of stocks relative to the US economy, by dividing the stock market’s market capitalization by the United States’ GDP. Zschaepitz tweeted:

“Global stock mkts have hit another milestone. All stocks now worth more than 100% of global GDP for the 1st time since 2018, pointing to stretched valuations. For Warren Buffett, a Market Cap to GDP Ratio >100% means stocks in bubble territory.”

The global markets have entered into a bubble territory for the first time since 2018, and if the indicator is above 100, then it means the stock market is heading into a bubble.

Bitcoin (BTC) price pushed past $12,000 for the second time this month, after breaking its resistance level at $11,800. Altcoins including Chainlink (LINK) and its rival Band Protocol (BAND) have been witnessing double digital gains. At press time, Bitcoin has slumped a little lower, trading around $11,972.

Bitcoin price could see a further correction if it fails to break $12,000 again, with the possibility of the stock market entering the bubble territory.

Chainlink (LINK) has reached another all-time high at reaching $14.0551 on Binance, while also climbing up the market capitalization ladder, reaching the sixth place on CoinMarketCap.

China told its citizens to buy stocks—a possible stock market bubble

As reported by Blockchain.News, in early July, the Shanghai Composite Index has seen its biggest one-day percentage gain since the summer of 2015 when the stock market bubble burst. The index saw a 5.7 percent surge on July 6, following a state-owned publication in China advocating for a “healthy bull market” in the country for post-pandemic recovery.

Following the Asian stock market, US stocks jumped as well amid the second wave of surging coronavirus cases in the country.

The stocks on Wall Street saw an uptick as well, while the Dow Jones Industrial Average jumped 1.8 percent, and the S&P 500 rose 1.6 percent, and the Nasdaq Composite hit an all-time high, surging 2.2 percent to close at 10,433.65.

Bitcoin showed signs of a slight bullish uptick in its first session in July and maintained a short-term positive correlation with the S&5 500.

Winklevoss Twins Brief David Portnoy on Bitcoin, BTC Talks Continue

American internet celebrity David Portnoy officially hosted the Winklevoss twins for a long-due conversation regarding Bitcoin (BTC) and cryptocurrencies.

Barstool Celebrity and Winklevoss Talk Bitcoin

Initially calling out the Gemini co-founders in an August 4 Twitter video, Portnoy took to his social media and released a video begging the Winklevoss Bitcoin billionaires to come over to teach him about the cryptocurrency market, repeating numerous times that he didn’t know anything about BTC. He said that he had invested in bitcoins at some point and that he lost the cryptos, jokingly saying that his “20 grand was just sitting somewhere in the Ether.”

The Barstool Sports founder and stocks enthusiast resorted to his usual antics on his Twitter platform and implored the Winklevoss twins to “make it simple.” He said that if they could just show him how to “do it,” invest in Bitcoin in a strategic way, then he will most definitely buy BTC.

Cameron and Tyler Winklevoss both responded to the Davey Day Trader’s video amicably and Portnoy hosted the Bitcoin advocates in a podcast released yesterday.

Winklevoss Billionaire, Always a Bitcoin Fan

Not only does founding the global crypto exchange Gemini count among their exploits, but Winklevoss twins are also known to be the first Bitcoin billionaires. Needless to say, they have both been huge advocates of Bitcoin, which is the largest cryptocurrency on the market, valued north of $11,700 at the time of writing.

The twins have both on numerous counts leveraged their social media presence to educate their followers on the advantages of investing in BTC.

With the US’ economic stimulus strategy in light of the global economic downfall and COVID-19, Tyler Winklevoss had publicly tweeted that the Federal Reserve was continuously “setting the stage for Bitcoin’s next bull run.”

With the Federal Reserve having to print money to deliver economic stimulus relief and the US dollar consequently depreciating in value, Winklevoss is saying that this will in turn drive the price of Bitcoin up on the crypto market.

Bitcoin Emerges from Slump

Winklevoss’ faith in the cryptocurrency has proven to be a self-fulfilling prophecy, as Bitcoin recently emerged from a long slump and has slowly regained its place on the market, creating quite a buzz on Wall Street.

Bitcoin has finally surged past the $11,500 mark for the first time since last September. Cryptocurrency investors worldwide have the utmost faith in BTC, which is the most dominant and valued cryptocurrency on the market. Despite the recent bull run and Bitcoin dropping after having pushed past the $12,000 mark point twice, experts and crypto enthusiasts like the Winklevoss are adamant on Bitcoin still shining and on its future potential on the crypto market.

Wall Street veteran Raoul Pal even publicly stated that according to his predictions, “Bitcoin is likely set to be the best performing major asset in the world over the next 24 months and by a big margin.” Bitcoin enthusiasts are optimistic about the cryptocurrency, despite the global stock market entering “bubble territory” for the first time since 2018, with the ongoing inflation of the US dollar.

DeFi Rules

In parallel to Bitcoin, there has been a recent surge in popularity in the decentralized finance (DeFi) industry, with DeFi altcoins outperforming BTC. Chainlink (LINK) and Band Protocol (BAND) have both witnessed double-digit gains, with LINK altcoins reaching an all-time high on Binance, capping at $14.0551, and reaching fifth place on CoinMarketCap.

Warren Buffett Ditches US Dollar, Bitcoin Price Set to Soar

As the US dollar keeps plummeting, Max Keiser revealed that Warren Buffett has moved his assets out of the US market, an investment strategy that the Keiser Report host says will set the tone for Bitcoin’s next surge.

Warren Buffett exits USD

Warren Buffett has invested in the Japanese market, buying a 5% stake in each of Japan’s five biggest trading houses. The investment move by the Berkshire Hathaway CEO totaled over $6 billion and comes at a time when the US dollar keeps dropping. The US Federal Reserve also recently disclosed in a meeting that the central bank is prepared to let inflation rise above the 2% target as a temporary relief measure. Since then, the US dollar has dipped and is not showing signs of recovery anytime soon, a move that Buffett has seemingly forecasted, according to Max Keiser.

Speaking about his new venture in the Japanese market, Buffet disclosed in a statement shared with Reuters and expressed his sentiment regarding the investment:

“The five major trading companies have many joint ventures throughout the world and are likely to have more. I hope that in the future there may be opportunities of mutual benefit.”

Buffett’s exit from the US dollar and into Japanese assets may seem as a surprise to many market bulls, as trading houses have not been much of an investor favorite. However, ditching the world’s reserve currency should not come as a shock, since Warren Buffett had warned investors previously that the US stock market was on the verge of bubble territory. This has also been determined by the Buffett Indicator, which divides the Wilshire 5000 Index with the annual gross domestic product (GDP) of the US.

The Buffett Indicator is predicting that there will be another stock market crash, and market investors such as Jim Rogers have echoed the sentiment by pointing to the depreciation of the dollar as a result of mass currency printing by central banks to stimulate economies worldwide during COVID-19.

Buffett believes in gold

Buffett, who has previously called gold a “non-productive asset,” had also taken investors by surprise by making investment changes and buying a stake in Barrick Gold Corp. The renowned investor has been critical of gold beforehand but has seemingly shifted his views regarding the asset, with the price of gold surging this year by almost 30%.

Buffett investing in gold may mean significant things for the traditional safe-haven asset, as institutional investors will likely follow.

What does this mean for Bitcoin?

With Buffett shifting his assets out of US markets and the US dollar greatly depreciating with the Federal Reserve mass printing stimulus money, investors have also taken to Bitcoin (BTC) as a hedge investment, a move that Warren Buffett has adamantly said he will not do. However, with the stock market predictions given by the Buffett Indicator, Bitcoin may be heating up for another price run. The digital asset, often coined “digital gold,” had surged past the $12,000 point in July after breaking its resistance level at $11,800 and has been on the radar of many investors, as the US dollar keeps weakening.

Bitcoin pioneer Max Keiser has publicly declared that the US dollar is getting so weak that even Warren Buffett is getting out, and this move will only pave the way for Bitcoin’s next price run. Keiser tweeted:

“Buffett’s move into Japan, along with his GOLD investment, confirms he’s getting out of $USD BIGLY. $USD is trending lower today, about to break key support. Bitcoin, Gold, and Silver will all make new all-time highs in the near term.”

The Bitcoin price is currently hovering around the $11,600 mark, at the time of writing.

Has the DeFi Bubble Burst? Top DeFi Tokens Crash by 50%

The decentralized finance (DeFi) industry appears to be crashing, with DeFi tokens plummeting and dropping by 50% and more, over the past seven days.

The recent crypto market has suffered incredible fiat losses, and market experts have speculated that the DeFi bubble has burst. With several top DeFi tokens such as Curve (CRV) and Meta (MTA) losing more than 50% of their crypto value over the past seven days, speculations on whether recovery will be possible have been brought into question.

What goes up must come down- DeFi assets plummet

Data from crypto market analytics firm Messari surveyed several DeFi assets. According to the official report, 32 of 34 DeFi tokens were down over the past week, crashing by 50% and more for certain assets.

The only DeFi digital assets that seem to have experienced market price gains are PowerPool (CVP) and SushiSwap (SUSHI). However, even SUSHI experienced a price plummet of its own, after SUSHISWAP founder Chef Nomi liquidated his SUSHI monetary gains for Ether (ETH), sending the token from a price value of around $7 to lows of $2. At the time of writing, SUSHI is trading at $2.37, according to data from CoinMarketCap.

With at least 6 DeFi assets dipping more than 50% over the past week, it has been rough for DeFi. Data from Messari indicated that Curve (CRV) is down 65% this week, and other governance tokens have followed suit, with Meta (MTA) experiencing a 59% loss, REN with a 52% dip, and AirSwap plummeting and losing 51% of its fiat value.

The high volatility levels and the huge sell-offs experienced by the DeFi industry has got many investors wondering whether the decentralized finance craze is approaching an end, after an incredible run. At the time of writing, more than 60% of DeFi tokens surveyed by Messari has posted a 30-day loss, with Curve (CRV) leading the pack.

Ethereum (ETH) tokens have also dipped and fallen back in pricing. According to Messari’s findings, only 14 of 178 markets have experienced surges this past week, seven of which were reported to be stablecoins.

DeFi to keep dominating the market?

The UMA DeFi token seems to be consolidating around the $15 price level, and is as of now the largest DeFi project in the industry, with a $1.3 billion worth in market capitalization, according to CoinMarketCap.

While the DeFi bubble appears to have popped, some traders have seized the opportunity to stock up on discounted tokens. Investors are hopeful for a recovery, despite price slumps and 95% of DeFi digital assets recording a dip in value over the past seven days.

Winklevoss Backs Ethereum DeFi Craze, Despite Crypto Downtrend and Market Experts' Concerns

Despite speculations that the decentralized finance (DeFi) industry is rapidly approaching bubble territory, the Winklevoss twins affirmed the contrary, saying that the current DeFi craze is a revolution in the making.

Is the DeFi bubble going to burst?

This week, DeFi tokens have been in the red, with the crypto market struggling to stay afloat and maintain an upward trend. Some of the largest DeFi tokens by market capitalization have recorded high double-digit price dips this week, such as UMA, YFI (Yearn.Finance), LEND (Aave), and COMP (Compound).

However, despite the bearish momentum, the Winklevoss twins have asserted that DeFi’s boom was here to stay. The Bitcoin billionaires backed the Ethereum-based financial protocols, saying that the current DeFi boom was nothing like the “2017 initial coin offering craze”, where ICO became highly popularized before the crypto bubble burst, with nearly half of the projects failing by 2018.

Gemini co-founder Cameron Winklevoss said:

“DeFi is not the same as the 2017 ICO craze. Back then, money was raised on shitcoin white papers written in a coffee shop. DeFi is already live and working in the wild. Billions of dollars are at work earning positive yield. This isn’t hypothetical vaporware, this is real.”

Winklevoss expressed that the current decentralized finance hype was here to stay, going against a major concern that many investors seem to be having. Some crypto experts, such as Ethereum co-founder Vitalik Buterin, expressed that DeFi seemed to be unsustainable in the long run.

Buterin previously addressed the sharp supply inflation perceived among many governance tokens and said that they would have to be printed constantly to keep the underlying ecosystem running. In the long run, yield farming tokens would prove to be unsustainable, according to the Ethereum co-founder.

Cameron Winklevoss and Buterin appear to be divided on their stance about the DeFi industry’s sustainability. Tyler Winklevoss backed his brother and expressed through a tweet:

“Yield is something you used to earn from your bank. Now you earn it from a smart contract. The #DeFi revolution is upon us…”

Yield farming consists of a way in which DeFi projects award governance tokens to users who generate liquidity, either through borrowing, lending, or token exchange.

The gained crypto assets are locked into a specific DeFi protocol, which operates off the Ethereum blockchain for the most part. It is in a way comparable to the annual interest an investor can earn from keeping money in a traditional banking institution.

Uniswap’s UNI bounces back

Currently, despite the observed downtrend of the majority of the crypto market, Uniswap’s UNI token has recorded a rebound within the past 24 hours, making an 11 percent gain within a day. UNI token was only launched last week, with one billion governance tokens minted. At the time of writing, Uniswap’s platform is ranked first on the DeFi market in terms of total value locked (TVL), estimated to be worth $1.7 billion cryptocurrencies.

Deutsche Bank Survey Places Bitcoin, Tesla, and US Tech Stocks as The Biggest Market Bubbles

Many investors seem to think that the current financial market is caught in bubble territory, with Bitcoin, Tesla, and tech stocks leading the pack.

According to a Deutsche Bank survey, 89% of investors think that Bitcoin and US tech stocks are the leading market bubbles as of now. The survey indicated that on a scale of 1-10, with 10 being the highest extent of the bubble, respondents classified Bitcoin as a 10.

This suggests that most investors participating in the Deutsche Bank survey, namely 727 market professionals, are anticipating that Bitcoin’s price will likely drastically plummet in the near future. Trailing behind Bitcoin, US tech stocks were perceived as the next largest bubble, with 83% of market experts giving the tech bubble a rating of 7 and higher on a scale from 1-10. Tesla and other tech stocks were likely to fall than rise in the upcoming year.

Deutsche Bank shared with CNBC:

When asked specifically about the 12 month fate of Bitcoin and Tesla – a stock emblematic of a potential tech bubble – a majority of readers think that they are more likely to halve than double from these levels with Tesla more vulnerable according to readers.”

Bitcoin and Tesla surge

Bitcoin has been escalating to new heights in an effortless manner, and its bull run seems to be sustained and still ongoing. The largest digital asset by market cap touched an all-time high of nearly $42,000. Currently, it has pulled back, trading sideways at $35,775 at the time of writing.

Market experts from JPMorgan Chase and Co have said that it was imperative that Bitcoin broke the $40,000 level for its bullish momentum to remain intact, or its price may be threatened by “trend-following” investors rather than serious supporters.

On its end, Tesla has climbed massively in share prices in 2020, making its CEO Elon Musk one of the world’s richest man, second only to Amazon’s Jeff Bezos. On a 12-month period, Tesla stocks have gone up by 700%. Nevertheless, market experts have predicted that the stock will fall sharply in the upcoming year. What will “pop” Tesla, tech and Bitcoin bubbles still remain unclear.

Factors supporting the BTC and tech bubble

However, factors that have pushed Bitcoin and tech stock popularity are still present and “likely to stay,” according to the survey. The Federal Reserve mass printing money to deliver Covid-19 relief through stimulus packages is pinpointed as an “easy monetary situation” supporting the financial market bubble, for one. President-elect Joe Biden’s $1.9 trillion funding bill will inevitably lead investors to continue seeking out ways to store their wealth, which may bolster the Bitcoin bubble feared by investors.

Previously, Bitcoin billionaires Cameron and Tyler Winklevoss have said that the depreciation of the US dollar caused by the Federal Reserve’s money printing was an easy endorsement of Bitcoin as a hedge.