“Everything Rally” in Crypto and Other Assets Will End in Disaster – Here’s Why

Market pundit Gary Shilling expects treasury volatility in crypto, stocks, and other assets to end in disaster. The former Merrill Lynch economist predicts that the 2023 surge will come to a “painful conclusion.”

Shilling has observed the greatest volatility in the bond market since the dotcom and 2008 financial crises. He opined that the exuberance of retail investors when markets peak foreshadows “severe punishment.”

Accurate Market Prophet Advises to Sell Crypto

According to Shilling,

“The extreme recent financial speculation is also certain to end with big price declines and huge losses by speculators. Signs that the end is near are proliferating.”

He argued that recent upticks in the commercial real estate securities market appear suspicious because of a credit crunch in the office space market. When that market collapses, he believes it could take down other sectors. He adds that the fight against inflation may cause more job losses despite inflation cooling in the past six months.

Electric vehicles, green energy, environmental, sustainability, and growth (ESG), artificial intelligence, and several other categories are fads that “may disappear without a trace,” he said. If they survive, it will only be “after excruciating industry consolidation and losses.”

The former economist said Nvidia, Tesla, and five other tech companies are similar to the trio of Kodak, Polaroid, and Xerox, which peaked during the 1930s yet suffered major losses during a 1970s recession. He advises investors to sell stocks and bet against crypto. However, Shilling predicted a crypto crash for several years before it occurred in 2022.

Performance of Bitcoin (Orange) vs S&P 500 (Blue) in the Past Five Years | Source: WSJ

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What CFOs Expect for 2024

Shilling’s predictions come from last year’s solid corporate earnings and the hype created by generative artificial intelligence. Still, some US CFOs expect a recession and see 2024 as a year to think soberly.

According to Gina Mastantuono, the CFO of cloud software provider ServiceNow, uncertainty has become the new normal. She said that the shifting macro environment has created a scenario where CFOs must balance offense and defense.

Carl Ford, the CEO of Academy Sports+, thinks the American consumer is under pressure, so his company is prioritizing value. High-interest rates eat into household budgets, lowering their capacity to splash out on high-value goods.

Read more: How Bear Markets Can Benefit Your Business

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