In the midst of the cryptocurrency craze, analysts believe that someday the hype will slowly fade. At the same time, Wells Fargo head of equity strategy, Christopher Harvey told CNBC that the cryptocurrency market crash will affect the stock market.
"There is a significant amount of froth in the cryptomarkets. We do think that if that froth comes out, it will start to spillover," Harvey said on CNBC.
Bitcoin prices have swung wildly due to its volatile nature in the past few weeks. Prices have reached almost $20,000 before plummeting down to lows of $12,000. At the same time, Ethereum saw prices go from $850 down to $630, while Litecoin fell from $360 to $225, at the same time.
“What we're worried about is froth coming out of that market, and that's starting to affect equities," said Harvey. "You're seeing it a little bit, but just not to a large degree. And, it's something to watch out for in 2018."
Harvey projects that the first half of the year will be stronger than the second half, then he predicts that stocks will directly correlate according to the cryptocurrency market.
Some analysts predict bitcoins to explode nearly double or even triple more than its current price. There is a likelihood that this may happen, but prior to that mark, investors can definitely expect another crash.
As of now, the cryptocurrency market has not significantly affected the stock market, but as bitcoin futures and possible ETFs begin to emerge, there is a chance that the two may began to work hand in hand.