Bitcoin Could Surge to $175,000, Ethereum to $17,000 Before Potential Market Correction

In a recent interview with Dutch host Paul Buitink on September 4, Henrik Zeberg, Head Economist at SwissBlock, outlined a two-phase scenario for the cryptocurrency market: first, a powerful "melt-up" phase driven by liquidity and momentum, followed by a significant market correction reminiscent of the dot-com bubble burst.

"We do have the largest bubble ever," Zeberg stated, suggesting that equities, crypto, and real estate markets will climb higher before the cycle eventually turns. He described the current market environment using a memorable analogy: "The music is still playing and you can still get a drink at the bar," indicating that despite concerns, sentiment and macro signals have not yet decisively turned negative.

Final Surge Before Potential Market Correction

Zeberg positions the current market late in the business cycle but not yet at the breaking point. He noted the absence of classic pre-recession indicators in yields, credit spreads, and initial jobless claims. "A crash doesn't come out of thin air," he explained. "We simply don't see those signals just yet."

With global liquidity improving at the margins and the Federal Reserve already shifting its tone, Zeberg anticipates a sharp upside phase comparable to Japan's 1989 market finale—a rising trajectory that steepens into a nearly vertical blow-off top. For traditional markets, he projects the S&P 500 could reach approximately 7,500 to 8,200 from its current level of around 6,400.

Cryptocurrencies, according to Zeberg, will amplify this movement significantly. He forecasts Bitcoin could first reach "at least" $140,000, before potentially topping out somewhere between $165,000 and $175,000 prior to any market correction. For Ethereum, he projects a peak near $17,000, based on the assumption that the ETH/BTC ratio could expand to approximately 0.12 during a late-cycle altcoin phase. Zeberg emphasized that this trajectory would develop rapidly: "When things are moving in crypto and into the final phase of a bubble, it can be very, very fast."

US Dollar: The Potential Catalyst

The cornerstone of Zeberg's thesis is the US dollar. He is closely monitoring for a bottom in the Dollar Index (DXY) followed by a potential surge to the 117-120 range—what he describes as "the wrecking ball" that could severely impact risk assets as global dollar demand spikes. "If we're going to see somewhat of a crisis, all this debt will need to be settled in dollars," he explained, calling the dollar "still the cleanest shirt," despite it "getting quite nasty."

In this scenario, liquidity preference would overwhelm risk appetite, credit would tighten, and deleveraging would begin—particularly outside the US, where dollar liabilities would collide with local-currency cash flows.

Zeberg argues that monetary easing cannot ultimately prevent a cyclical turn once the real economy begins to contract. Rate cuts might initially boost markets—"You're going to see it running up really fast"—but then "the more wise people in the market" will interpret this as weakness rather than salvation. He anticipates the Fed will begin with a 25 basis point cut this month, while leaving open the possibility of a larger move.

Either way, he envisions a relatively short deflationary period—"six to nine months" by one estimate—followed by policy panic and subsequently a stagflationary phase in which "the tools of the Fed will become impotent." Zeberg was critical of the economics profession's inflation frameworks, criticizing what he called the "hubris" of attempting to micromanage CPI to exactly 2% and questioning the decision to award Ben Bernanke a Nobel Prize for what he characterized as "reinventing money printing."

Commodities Outlook and Digital Assets

Zeberg's commodity framework fits into this sequence. He expects gold to fulfill its "finest duty" during a liquidity crunch—being sold to raise cash—before it follows a pattern similar to 2008 with a steep decline followed by a powerful recovery. He referenced the 2008 pattern of approximately 33-35% peak-to-trough decline in gold and as much as 60% in silver before policy responses triggered a new uptrend.

Over the longer term, however, he projects gold "into the 2030s" potentially reaching as much as $35,000 per ounce as negative real rates, balance sheet expansion, and an eventual "monetary reset" redefine monetary value. This reset, in his view, would anchor a new settlement system based on gold and ledger-based infrastructure—"a digital element to it," but "not Bitcoin."

Strategy: Structure Under Scrutiny

During the interview, Zeberg made particularly pointed comments about Strategy (formerly MicroStrategy), the largest corporate holder of Bitcoin. "I think we have the largest open Ponzi game when it comes to MicroStrategy," he stated. "Everybody needs to pile into the stock, then he can take on some more debt and he buys more Bitcoin."

He connected the firm's vulnerability to his macro thesis: if DXY reaches 120 and "the largest bubble in the world, the Nasdaq," experiences an 85%-type drawdown, "Bitcoin is going to have a really, really bad period—and then that means MicroStrategy is going to have that."

He characterized the structure as "the largest house of cards we have seen in a long time" and cautioned that an unwind would be "really, really bad for people who think they can just hold on to it." These characterizations were his personal assessment; he did not present evidence beyond his cyclical and balance-sheet reasoning, and his comments were framed within his broader melt-up-then-bust scenario.

Beyond major tokens, Zeberg argued that "99%" of crypto projects will ultimately fail, with only a handful emerging like the Amazons that survived the dot-com collapse. He distinguished between speculative coins and blockchain projects delivering real-world utility, while warning that "this rampant speculation" has been extended by an era of easy monetary policy.

Regarding timing catalysts, Zeberg downplayed the notion of a single trigger and instead described an environment that "becomes toxic" as high rates, declining real income, and rising delinquencies pressure banks and corporations. He is monitoring front-end yields—which he says have begun to "break some levels"—credit spreads, and the dollar's trajectory.

He also observed that large-cap tech's earnings concentration has "distorted" the market and that even quality small-cap tech is likely to be pulled lower in a broad-based correction. The first stage, however, remains higher. "It's a self-propelling cycle," he said of the market melt-up, fueled by FOMO and the belief that "the Fed has got our back."

At the time of reporting, BTC was trading at $111,528.