Stifel: Bitcoin Could Fall to $38K Amid Fed Hawkishness and Tech Volatility

Bitcoin could fall as low as $38,000 in coming months, per Stifel analysts, based on a 42% drop from Thursday’s $65,433 price on CoinGecko. The assessment uses historical lows from 2011 (93%), 2014 (84%), 2018 (83%), and 2022 (76%) to project a potential 70% drawdown this cycle, their worst-case scenario. The analysts linked the recent decline to the Federal Reserve’s December tightening and hawkish signals, noting a widening gap between Bitcoin and the Nasdaq 100 since October. XRP led broader crypto declines as Ethereum and Dogecoin cratered alongside Bitcoin. Higher inflation expectations and credit stress from AI investments have depressed tech stocks, which are correlated with Bitcoin, creating a volatile environment. If FOMC members continue a data-dependent tightening stance to curb inflation, the outlook for Bitcoin and tech equities could remain cautious.