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Bitcoin's Wild Ride: Tech Stock Experts Weigh In on Why Bitcoin's Trading Like a Tech Stock

The cryptocurrency market has been on a wild ride in recent weeks, with Bitcoin's value plummeting by over 20% in a matter of days. The sudden downturn has left many investors wondering what's behind the dramatic decline. Are we seeing a repeat of the 2017 crypto bubble, or is there something more fundamentally wrong with the market?

To get to the bottom of this, we spoke with several tech stock experts to gain their insights on the current state of the market. Here's what they had to say:

"The biggest issue is that Bitcoin has become a technology stock, not a currency," says Dan Ives, Managing Director and Senior Equity Research Analyst at Wedbush Securities. "People are buying it because they think it's going to go up, not because they want to use it as a store of value. That's a recipe for disaster."

Ives points out that the rise of decentralized finance (DeFi) platforms, which allow users to lend, borrow, and trade cryptocurrencies, has contributed to Bitcoin's increasing correlation with tech stocks. "When the Nasdaq goes up, Bitcoin goes up. When the Nasdaq goes down, Bitcoin goes down. It's a classic case of a correlated market."

Another expert, Michael Novogratz, Founder and CEO of Galaxy Digital, agrees that the DeFi phenomenon has played a significant role in Bitcoin's recent performance. "DeFi is a game-changer. It's bringing in a whole new set of investors who are looking for yield and returns. That's driving up demand for Bitcoin, which is then driving up its price."

However, not all experts are convinced that Bitcoin's recent performance is a result of DeFi alone. "The real issue is that Bitcoin's fundamentals are weak," says Mike McGlone, Chief Market Analyst at Bloomberg Intelligence. "The block reward is decreasing, the network is getting congested, and the hash rate is declining. These are all signs of a maturing market that's due for a correction."

Despite the recent downturn, many experts remain bullish on Bitcoin's long-term prospects. "I think we're in a pause, not a crash," says Ives. "The fundamentals are still there, and I think we'll see a rebound once the dust settles."

For now, investors are left to navigate the choppy waters of the cryptocurrency market. While the short-term volatility may be unsettling, many experts believe that Bitcoin's underlying value will ultimately prevail. As Novogratz puts it, "Bitcoin is a global phenomenon. It's not going away anytime soon."