Stifel said a Bitcoin peak could signal trouble for the stock market and a shift in market leadership. Barry Bannister, chief equity strategist at Stifel, said in a note on Wednesday that there is evidence that cryptocurrencies may be peaking, which could lead to a pullback in investor sentiment, weakness in large-cap tech stocks and a rotation in value. “Bitcoin and the Nasdaq 100 reflect the speculative boom fueled by cheap money following a dovish Fed turn (such as what happened in Q4 2023),” Bannister said. “We show that if Bitcoin reflects With optimism following a dovish Fed, it’s worth noting that Bitcoin (and the mania) may be peaking.” BTC.CM= YTD mountain Bitcoin, YTD “Investor mania for Bitcoin coincides with extreme bullishness in the stock market , which usually means stock indexes are overbought and prone to pullbacks,” he added. Bitcoin, which is up 71% since the start of the year and hit an all-time high on March 14, has been trading in a range of about 7% since then as investors took profits and digested recent gains. Shortly after, on March 28, the S&P 500 hit an all-time intraday high. Bannister said the year-to-date S&P 500 (SPX) peak, if it does peak year-to-date, could mean six months of continued weakness for the Nasdaq 100. Other impacts he highlighted include weakness in Nasdaq’s large-cap tech stocks and a pullback in investor sentiment due to year-over-year changes in the S&P 500’s performance. Additionally, the cap-weighted S&P 500 will likely compete with the equally weighted S&P 500 in about six months. “When the equal-weighted S&P 500 outperforms the S&P 500, value stocks tend to outperform growth stocks,” he said. —CNBC’s Michael Bloom contributed reporting.
