Bitcoin has been following S&P 500 and stocks for a long time. Experienced market strategist Jeff Saut, recently shared a very brave prediction that the S&P 500 index will rise above 4,000 in 12 months.
Considering the increasing correlation of Bitcoin with the leading US index, Saut claimed that such a move could have a pretty good effect on Bitcoin price.
Saut, the chief investment strategist of Capital Wealth Planning, has anticipated an increase in the US economy and especially in the S&P 500. The famous strategist, who was a guest of the Squawk Box on CNBC, explained the current economic situation of the USA and how they handled the COVID-19 pandemic.
When asked about the increase in the number of coronavirus cases and its possible effects on the economy, Saut said:
You live in New York City. Go to restaurants: Full. Restaurants in St. Petersburg are also full. The economy is much better than most economists thoughts. I think that the economy will survive from this crisis and we will see good gains. People are investing not much right now. There are $5 trillion in market funds. Markets are better than people think.
Saut added that the most popular US indexes may stop in the coming months, especially in the fall. According to the popular investor, the S&P 500 will rise above 4,000 in the next 12 months.
How will Bitcoin be affected?
Since Bitcoin was born, it has shown a performance that differs from stocks. Bitcoin, which is fundamentally different from stocks and looks like gold at the same time, has proved that it is actually a safe asset.
However, the outbreak of the COVID-19 changed this narrative to some extent. The leading cryptocurrency is now more connected with most stock market indexes and especially S&P. Apart from short-term separations, Bitcoin and the popular index draw similar price movements.
Whether Bitcoin will follow S&P 500 in such a situation is eagerly awaited. If it follows the same performance, Bitcoin price may increase by 25% to $11,700 and we can see a new ATH. But we should state that this is just a theory.
It is important to note that despite the similarities in their performance after the Black Thursday in March, S&P has still been negative since the beginning of 2020, while BTC has gained almost 30%.