I sent this update to paid subscribers on Friday. It’s critical, so I’m sharing it here with ALL Economy & Market readers today…

On December 19, I sent an Economy & Markets email about the similarity between the internet bubble and crash and the bitcoin bubble today.

At the time, I saw two possible scenarios. Both are still viable today, but the degree of the 60% crash in Bitcoin tells me that we’re most likely experiencing scenario two, where the cryptocurrency hit its top near $20,000.

That doesn’t take scenario one out of the running. There’s still a remote chance that Bitcoin could surge back and break above $20,000, after which it would be curtains.

Neither scenario is good news for stocks (and next week I’ll reveal the new leading indicator I’ve found that shows an eight-week lag or so between Bitcoin and stock market moves… look out for that in Economy & Markets tomorrow).

For now though, here are some updated charts…

The internet bubble saw a 46% crash in 1999 before rocketing to a new high in early 2000. The Bitcoin bubble has already seen a 60% crash, which makes a new high or scenario one less likely. But it is still possible if we can hold the recent 8,800 lows at 60% down from the top.

That said, this recent crash makes scenario two look more likely, especially if it goes down further.

That scenario would see a crash down to as low as $800 to $1,000 on Bitcoin, which would be down more than 95% from the top.

That would be a signal of bubble worry for the stock market, as I will show tomorrow in Economy & Markets.

The coming weeks are critical.

Any new lows in Bitcoin would strengthen the likelihood of scenario two unfolding – that Bitcoin and cryptocurrencies peaked around $20,000 and the stock market will follow on about an eight- to nine-week lag.

Look out for tomorrow’s email on that new leading indicator.

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Harry Dent
Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.