“What you are seeing is that cryptocurrencies are definitely in a bearish cycle. It's going to struggle for the next 12 months, then we'll go back to the next bull cycle triggered by the next halving event," Yusko said.
The last Bitcoin halving event occurred in May 2020. The next one is expected to take place during the first six months of 2024.
Bitcoin has no correlation to stocks.
Yusko also says that Bitcoin is not correlated to stocks, although it might appear to be on shorter timeframes. For example, Bitcoin is down 7.77% year-to-date compared to the Nasdaq, which is down 9.89% year-to-date on the back of Federal Reserve intentions to raise rates. .
“You can't calculate the short-term correlation. Just the math doesn't work. And yes, it is true that in times of stress, all correlations go to one," Yusko said.
“Step back, Bitcoin's correlation to stocks is 0.15 over long periods of time. Some weeks, some months, it goes up, but in the long run, it's still 0.15 and for bonds it's 0,” Yusko said.
The correlation can take a value between -1 and 1. The higher the value, the stronger the correlation, and the lower the value, the weaker the correlation.