Markets
Crypto Swings as Nvidia Drop Wipes $500 Billion — ‘Momentum Trading Likely Over’ – DL News
- Nvidia may have surpassed it.
- That could trigger a sell-off in the technology sector, analysts say.
- However, it could also give crypto an opportunity to regain the spotlight.
Crypto investors are not just dumping their holdings because of Mount Gox Fears — they’re also grappling with the idea that $3 trillion chipmaker Nvidia may have surpassed.
This could be tumultuous for technology stocks in general, according to Markets.com analyst Neil Wilson.
“Impulse trading is likely over,” he said in a note to clients. A consolidation of portfolios “will make it significantly more difficult for the broader market to continue reaching new highs over the summer.”
Bitcoin is down 6% since Nvidia topped on June 20.
Meanwhile, Ether fell 4%, although analysts predict spot Ethereum exchange-traded funds will probably release over the next seven days.
Noelle Acheson, former head of market insights at Genesis Global Trading, agreed.
“When the stock market turns, we will likely see panic selling in cryptocurrencies as well, for no fundamental reason other than emotion,” she said. he wrote in his “Crypto Is Macro Now” newsletter. “Maybe the need to raise money for margin calls with everything we can.”
Acheson noted that Nvidia has shaved $500 billion off its market capitalization — an amount that exceeds the gross domestic product of many countries, even wealthy ones, including Austria.
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“Let that sink in,” she said.
But not everyone is pessimistic. Ram Ahluwalia, CEO of crypto investment advisor Lumida Wealth, argued that crypto could benefit if Nvidia no longer occupied the spotlight.
“Quick money capital that would normally flow into cryptocurrency is going to Nvidia,” he posted on X two weeks ago.
In other words, as Nvidia continued to reach new highs, market participants looking for quick profits were focusing on the stock and other AI companies.
Ahluwalia noted that the GameStop rally in January 2021 had the same effect. While shares soared 2,065%, Bitcoin consolidated and ended the month at the same starting price.
Therefore, Nvidia’s drop could be an opportunity for Bitcoin and Ethereum to capture the market’s attention again – if they can.
“Crypto needs to be at the forefront now,” Ahluwalia he said yesterday.