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Big companies have had a great run, with their prices going up a lot for quite some time. According to Fidelity's analyst, we might be reaching the end of a winning streak. This idea comes from something called the CAPE model, which tries to guess future stock returns based on past company earnings.
The model says that the good times in the stock market, with high returns, may slow down to just 2.6% by the year 2034. If that is true, it means the big rise in stock prices might be cooling down.
Now, people like Jurrien Timmer at Fidelity also look at other ways to think about this, bringing up dividends or stock buybacks. In the U.S., companies are giving back 72% of their earnings, which is a lot compared to other places.
But the question is, what does this mean for Bitcoin and other cryptocurrencies?
Bitcoin is often seen as different from regular stocks. It does not rely on company earnings or the same business stuff. But it can still feel the effects when big market changes happen. If people get less money from stocks, they might look for other places to invest, like Bitcoin. Or, if they are worried about the stock market slowing down, they might want to put their money in something that does not follow the same rules, which could be good for Bitcoin.
On the other hand, if the stock market does go down, people will avoid risks. Bitcoin can be pretty wild when it comes to prices going up and down, which might scare off some investors.
Alex Dovbnya
Dan Burgin
Vladislav Sopov