Bitcoin’s decline is mirroring SaaS stocks, proving that it is unlikely a crypto-specific narrative is driving the recent selloff, one analyst argues.
A major market downturn that saw crypto markets lose $250 billion in total capitalization over the weekend is due to a shortage of US liquidity, rather than any crypto-specific problem, argues Raoul Pal, founder and CEO of Global Macro Investor.
“The big narrative is that BTC and crypto are broken. The cycle is over,” said Pal on Sunday, explaining that this can’t be the case because Software as a Service (SaaS) stocks have fallen in tandem.
SaaS stocks and Bitcoin (BTC) have moved in lockstep recently, both dropping significantly, which is notable because both are “long-duration assets,” as their value is based heavily on expected future cash flows and adoption, making them sensitive to liquidity conditions and interest rates, he said.
