Stay up to date with the CriptoTendencia WhatsApp channel: Instant news about Bitcoin, Altcoins, DeFi, NFT, Blockchain and Metaverse. Subscribe!
The impressive rally in US stocks and cryptocurrencies in 2024 has raised red flags, according to Michael Hartnett, strategist at Bank of America (BofA). Both the stock market and the digital asset market could be reaching levels that some call “overvalued.”
A stock market at all-time highs
The S&P 500 index has risen 27% this year, marking its best performance since 2019. The index’s price-to-book ratio has climbed to 5.3 times, approaching the peak of 5.5 reached in March 2000, during the technology bubble. According to Hartnett, if the index reaches 6,666 points in 2025, 10% higher than current levels, there could be a “high risk of overvaluation.”
Although the strategist adopts a more neutral tone in 2024, he highlights that there are still no clear signs of euphoria among global investors, according to BofA’s “bull-and-bear” indicator.
More Read
Cryptocurrencies: a new economic protagonist?
The Cryptocurrency market has also had an extraordinary year. Bitcoin, which briefly surpassed $100,000 this week, now has a market capitalization of more than $2 trillion, comparable to the size of the world’s 11th largest economy.
Hartnett highlights that President-elect Donald Trump’s “pro-Bitcoin” policies have been a key catalyst for this growth. Trump’s commitment to policies that prioritize national markets and his support for the crypto ecosystem have injected optimism into both Wall Street and the digital asset market.
Artificial intelligence and economic optimism
Another factor behind the rally in the markets has been the rise of artificial intelligence (AI). Advances in this technology have boosted growth expectations and have led investors to bet on sectors related to innovation.
However, Hartnett warns that while market fundamentals are strong, current levels could be unsustainable if optimism does not translate into tangible economic growth.
What’s next for the markets?
With the S&P 500 approaching all-time highs and Bitcoin setting new records, investors face a dilemma: will this bullish trend continue into 2025, or are we looking at a prelude to a significant correction? According to BofA, markets are not yet showing clear signs of a bubble, but caution will be key in the coming months.
This scenario will be watched closely, especially given the impact of economic and technological policies that will continue to shape the global financial landscape.
Related
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
