Bitcoin could fall to $3.5K as recession intensifies and stocks collapse - Gareth Soloway
(Kitco News) - Bitcoin, which is currently trading around $20K, could plummet to as low as $3.5K, said Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com.
"The first support is $12K-$13K," he explained. "And then I do worry that you're going sub-$10K to $8K, and maybe in the worst case scenario to $3.5K."
He also highlighted that a recession was coming, and that stock markets would fare poorly.
"The problem is that consumers are going to run out of the money that they saved by mid next year," he said. "When they run out of money, and the Fed has just hiked into it, there is going to be a cliff dive for the economy."
Soloway spoke with David Lin, Anchor and Producer at Kitco News, at the Future Blockchain Summit in Dubai.
Stock markets won't recover for at least a decade, said Soloway, with blue chip stocks like Apple and Tesla facing more downside.
"I truly believe we won't see a new all-time high in the stock market for ten years," he said. "I have a price target of under $100 on Apple for the next twelve months or so… all tech stocks will be affected."
Apple is currently trading near $142 per share and has fallen by 20 percent over the year. The Nasdaq has fallen by 32 percent year-to-date.
Soloway suggested that consumer staple goods could perform well during the coming recession.
"As we get into a period where growth is harder to come by for tech stocks, you have to look towards these staples that people need," he said. "One of my favorites is GSK [GlaxoSmithKline]. Right now GlaxoSmithKline has been crushed, but it pays a great dividend… so you look for pharmaceuticals."
Headline inflation in the U.S. was 8.3 percent in September. In response to high inflation, the Fed has hiked interest rates by 300 basis points over the year, and more hikes are expected at their November meeting.
However, Soloway said that the Fed would eventually pivot, and either slow their tightening or reverse entirely.
"My [definition of a] pivot is where the Fed goes from 75 bps to 50 bps," he explained. "By 2023 in the first quarter, I think they're done… this is going to coincide with people running out of COVID savings."
To find out Soloway's stock picks and forecast for gold, watch the video above.
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