Eric Balchunas Calls Nvidia-Driven Market Sell-Off The '280th Nervous Breakdown,' Sees Bitcoin Base In The $60K

Eric Balchunas cited ETFs as a barometer, noting that the SPDR Gold Shares fund took roughly eight years to recover from its early peak and then more than doubled.

• Bloomberg's Balchunas said sell-offs like the recent drop in Nvidia were likely "algo-driven."
• Balchunas said investors in stock exchange-traded funds kept buying through the drop.
• According to him, Bitcoin was harder to hold through a downturn because it was sentiment-driven.

Bloomberg ETF analyst Eric Balchunas called the latest market sell-off "the 280th nervous breakdown that the markets have had in the past couple of years," on Friday, while saying Bitcoin (BTC) appeared to have found "a nice base somewhere in the 60s."

Unfazed By NVIDIA Selloff

Speaking with Scott Melker on The Wolf Of All Streets podcast, Balchunas said sell-offs like the recent drop in Nvidia (NVDA) tended to be "algo-driven, headline-driven," and possibly, "short-lived." He said he was "unfazed" and called the hit to the AI trade "more like a speed bump," unless earnings were running into "a real problem over the next couple quarters."

Balchunas said investors in stock exchange-traded funds (ETFs) kept buying through the drop. "The Vanguard people, they buy it always," he said. "You cannot shake them." Bitcoin ETFs have not followed the same pattern.

Balchunas estimated year-to-date outflows into the funds at about $1.4 billion. "I mean, it's almost flat. Considering the downturn and the negativity, that's pretty good," he said. "You're treading water in a year."

According to SosoValue data, U.S. Bitcoin ETFs stood at $1.75 billion in net outflows so far this year.

'Elevator Up, Stairs Down'

According to Balchunas, Bitcoin was harder to hold through a downturn because it had no cash flows. However, it was "sentiment-driven," but he added that "with all the bad news thrown at it, it seems to have this nice base somewhere in the 60s." 

He described Bitcoin's pattern as the reverse of stocks. "It takes the elevator up and the stairs down," Balchunas said, while stocks take "the stairs up and the elevator down."

Bitcoin’s price was trading at $68,000, down nearly 3% over the past 24 hours. On Stocktwits, the retail sentiment around BTC remained in the ‘extremely bearish’ zone, while chatter around it stayed at ‘high’ levels over the past day.

Pointing to ETFs as a guide, he also explained that the SPDR Gold Shares fund took about eight years to recover from its early peak before more than doubling. "Once the sentiment turns, though, it can go quickly because there's no new supply," Balchunas said.

His comments came as NVDA shares posted their worst week since April last year, falling about 13%, after Jensen Huang stepped down as CEO on Thursday. Balchunas said only "a real problem" with earnings would change his view.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<