Bitcoin and Nvidia Corp. experienced significant declines, breaking the notion that the market’s hottest trades are always profitable. Bitcoin faced a steep drop, leaving investors hoping for $60,000 to act as a technical support level. Nvidia, known for its role in the AI revolution, lost almost 7% of its value in just three days, marking the largest value loss for any company in history.
Despite the recent setbacks, both Bitcoin and Nvidia have delivered impressive returns over longer periods. However, the current turbulence has prompted concerns about the sustainability of the momentum in the market, especially with the looming possibility of higher interest rates.
According to Chris Weston of Pepperstone Group, investors are now realizing that momentum can work in both directions. Bitcoin’s performance heavily relies on sentiment, while Nvidia may have become an overly popular investment. Bitcoin stabilized slightly on Tuesday, recovering to around $61,000, while Asian stocks and tech-heavy Nasdaq 100 futures showed signs of resilience.
Carol Schleif of BMO Family Office LLC pointed out that an equal-weighted version of the S&P 500 rose even as Nvidia struggled, indicating that a broader market expansion is needed for sustainable growth. The influence of mega-cap technology companies may need to be diluted for a more stable market environment.
Overall, the recent downturn in both Bitcoin and Nvidia serves as a reminder to investors that no investment is a guaranteed one-way bet. While the market has seen remarkable gains in assets like cryptocurrencies and tech stocks over the past year, increasing volatility and the prospect of rising interest rates suggest a more challenging environment for risk appetite.Monitoring global stock, gold, and cryptocurrency trends in the coming months will be crucial in determining the market’s direction amidst the evolving economic landscape.
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https://finance.yahoo.com/news/bitcoin-nvidia-slumps-jolt-market-043901785.html