📈 The Warren Buffett Indicator, which shows the ratio of the Wilshire 5000 index* to the GDP of the United States, has risen to 200%. This is the second-highest level in history, higher than during the dot-com bubble (2000) and the global financial crisis (2008).
* The Wilshire 5000 index is a measure that includes almost all stocks traded on U.S. exchanges. It reflects the total market value of U.S. stocks and is used to assess the state of the economy.
In simple terms: stocks are currently very expensive compared to what the U.S. economy actually produces.
What does this mean for crypto? The stock market and crypto often go hand in hand. If stocks are so inflated, then any hint of a correction (which is likely with such overheating) could also hit crypto. Investors may start to liquidate risky assets, and Bitcoin along with altcoins could also decline. But there is a silver lining: if fiat begins to wobble, people may rush to cryptocurrencies as a "safe haven."
The summer will be very volatile…
