Economists warn that after Bitcoin reaches $175,000 and Ethereum reaches $17,000, a crash similar to the dot-com bubble collapse will occur.

In an interview on September 4 with Dutch host Paul Buitink, Henrik Seberg, the chief economist of SwissBlock, presented a two-step Road Map regarding Bitcoin and cryptoassets. First, there will be a final strong surge driven by liquidity and momentum, followed by a crash similar to the dot-com bubble burst caused by a strong Dollar and financial tightening.

“We are in the biggest bubble in history,” said Mr. Zeberg, asserting that stocks, cryptoassets, and real estate will rise further before the cycle turns. “The music is still playing, and we can still have drinks at the bar,” he joked, using a Titanic metaphor to explain why sentiment and macro indicators have not yet deteriorated decisively.

Bitcoin and Ethereum are expected to surge before the dot-com crash.

Mr. Zeberg positions the current situation in the late stage of the business cycle, but not at the point of collapse. He points out that there are still no typical triggers seen before a recession in terms of interest rates, credit spreads, and new unemployment insurance claims. “Crashes do not happen suddenly,” he says. “Such signs are not yet visible.” With global liquidity improving and the Federal Reserve already having “shifted” its tone, he anticipates a sharp surge reminiscent of Japan's final phase in 1989. At the index level, he sees the ultimate target for the S&P 500 rising from its current level of around 6,400 to about 7,500 to 8,200.

In his view, cryptoassets amplify this movement. Mr. Zeberg predicts that Bitcoin will first reach “at least” $140,000, and then peak in the range of $165,000 to $175,000 before the crash begins. Regarding Ethereum, he estimates around $17,000 on the premise that the ETH/BTC ratio will extend to about 0.12 during the late cycle altcoin phase. He emphasized that the journey will not be gradual but rather steep: “When cryptoassets move and enter the final stage of the bubble, it can become very, very fast.”

The essence of his theory is the Dollar. Mr. Zeberg is watching for the bottom of the DXY and the subsequent surge to 117-120. This will be what he calls a “destruction ball,” and as global demand for dollars surges, it will crush risk assets. “If a certain degree of crisis occurs, all this massive debt will need to be settled in dollars,” he stated, expressing that the greenback, “although it has become quite dirty, is still the cleanest shirt.” In this scenario, liquidity preference overwhelms risk preference, credit tightens, and particularly outside the U.S., dollar-denominated debt and local currency cash flows will collide, beginning deleveraging.

He argues that once the real economy begins to decline, monetary easing will ultimately not be able to prevent a turning point in the business cycle. While rate cuts may initially stimulate the market (“it will really surge fast”), afterwards, “the more astute people in the market” will speculate about weakness rather than salvation. He believes that the Federal Reserve will start with a 25 basis point cut this month, but he also leaves open the possibility of a larger shock move.

In any case, he believes that after a relatively short deflationary crash—“6 to 9 months”—there will be a policy panic, and a period of stagflation will follow where “the tools of the Federal Reserve will become powerless.” He criticized the “arrogance” of micro-managing the CPI to just 2%, and mocked Ben Bernanke's decision to award a Nobel Prize for the “reinvention of money printing” as “the most foolish thing I have ever seen.”

Mr. Zuberg's commodity framework will be incorporated into this trend. He predicts that after gold fulfills its “highest obligation”—to be sold to raise cash during a liquidity crisis—it will replicate the 2008 pattern and show a strong recovery after a sharp decline. He cited the example of 2008, where gold experienced a drop of about 33-35% and silver a maximum of 60% from peak to bottom, followed by a new upward phase initiated by policy responses.

However, in the long term, he predicts that gold will reach a maximum of $35,000 per ounce by the “2030s.” This is due to the negative real interest rates, the expansion of balance sheets, and the eventual “currency reset” that will revalue money. In his vision, this reset will peg a new payment system to gold and leisure-based rails—“having digital elements, but not Bitcoin.”

Strategy Inc.: The Largest Ponzi Scheme in the Market?

Regarding the risks of individual assets, Mr. Zeberg made one of the most provocative statements in an interview about Strategy, the largest corporate holder of Bitcoin (formerly MicroStrategy). “I think we are witnessing the largest open Ponzi game with Strategy,” he said. “Everyone rushes to that stock, and then he takes on more debt to buy more Bitcoin.”

He linked the company's vulnerabilities to his macro template: if the DXY heads towards 120 and “the largest bubble in the world, the Nasdaq,” experiences a decline of about 85%, “Bitcoin will really, really face a tough time—and that means the same for the strategy company.”

He referred to this structure as “the largest house of cards he has seen in a long time,” warning that its collapse would bring “really, really bad results for those who think they can just hold on.” This characterization is uniquely his own, and he did not present evidence that goes beyond the logic of economic cycles and balance sheets; his remarks were framed within his broader “surge followed by crash” scenario.

Beyond major tokens, Mr. Zeberg claimed that “99%” of cryptoassets projects ultimately fail, with only a few, like Amazon, surviving the dot-com crash. While distinguishing between speculative coins and blockchain projects that provide real-world utility, he cautioned that “this fierce speculation” is being prolonged by the era of monetary easing.

Regarding the timing catalyst, Mr. Zeberg downplayed the idea of a single trigger and instead explained that high interest rates, declining real incomes, and rising delinquency rates are putting pressure on banks and businesses, creating a “toxic” environment. He is monitoring short-term interest rates, credit spreads, and the turning point of the Dollar, which he says have “started to break through several levels.”

He also pointed out that the concentration of earnings among large technology stocks is “distorting” the market, and even high-quality small-cap technology stocks are likely to be dragged down by indiscriminate collapses. However, the initial phase is still on the rise. “It's a self-reinforcing cycle,” he said about the surge, driven by FOMO and the belief that “the Federal Reserve is behind us.”

At the time of writing the article, BTC is trading at 111,528 Dollar.

Disclaimer: For informational purposes only. Past performance is not indicative of future results.