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Prominent Danish macroeconomist Henrik Zeberg keeps warning about a major market crash.
Yet, in a recent social media post, he has predicted that the ETH price will soar.
"Biggest ever bubble"
Zerberg is confident that the current market bubble is the biggest ever. He argues that the "free lunch" of money printing is not an option anymore because we have reintroduced inflation.
"Because I am seeing what I think is inevitable: a big bubble bursting soon, and I see a crisis that is going to be much deeper than anything we have seen for many, many years," he said.
However, he expects the market to experience a "blow-off top" first, predicting that euphoria will be "extreme."
The economist is confident that Ethereum will outperform Bitcoin during the predicted mega-rally, but he also expects the entire crypto sector to eventually crash during the upcoming recession.
AI won't save investors
In 1840, as Zerberg recalls, the steam engine locomotive was introduced. A huge bubble developed because people were highly optimistic about the new technology. "Many companies were established, a bubble rose, and it burst. The UK fell into a big recession," he said during a recent podcast appearance.
"Fast forward to 2000: did the internet change the world like the radio, car, and steam engine? Absolutely. Did we see a bubble? We did, and it burst. People lost a lot of money," he added.
Stocks and crypto are currently 2.5X the estimated fundamental value of the market, which essentially means that there is a lot of speculative excess.
"If you add crypto to market capitalization, today we are at 250%. In 2000, the bubble was 136%. We are closing in on double the size of the bubble in 2000," he said.
He has noted that there are stretched earnings within AI and stretched PE levels. Nothing is new under the sun. "Psychology drives this, and nobody wants to look at it for what it is," the economist added.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team