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With Bitcoin briefly surpassing $100,000 and the S&amp;P 500 posting its best year since 2019, Bank of America’s strategist warns of a potential market overshoot. 
U.S. stocks and cryptocurrencies are showing signs of overheating, with <a href="https://crypto.news/tag/bank-of-america/" target="_blank">Bank of America</a> Corp.’s Michael Hartnett warning of a potential “overshoot” in early 2025, Bloomberg <a href="http://www.bloomberg.com/news/articles/2024-12-06/bofa-s-hartnett-warns-froth-is-building-in-us-stocks-crypto" target="_blank" rel="nofollow">reports</a>. 
The S&amp;P 500’s price-to-book ratio surged to 5.3 times in 2024, nearing a peak of 5.5 seen during the dot-com bubble in March 2000. Hartnett cautioned that if the index approaches 6,666 points — about 10% above current levels — the rally could overextend. Yet, despite this, the bank’s bull-and-bear indicator shows no signs of excessive optimism among global investors, the report notes. 
The S&amp;P 500 has gained about 27% this year, which seems to be its best year since 2019. For Bitcoin (<a href="https://crypto.news/price/bitcoin/" target="_blank">BTC</a>), it seems that Trump’s support for crypto fueled optimism and gave confidence to investors seeking gains on risk assets, which helped drive Bitcoin past $100,000 earlier this week. With a market capitalization exceeding $2 trillion, Bitcoin now ranks as the 11th largest economy in the world, Hartnett noted. 
 You might also like: <a rel="" href="https://crypto.news/bitcoin-price-prediction-2024-billionaires-crystal-ball-revelations/"> Bitcoin price prediction 2024: billionaires’ crystal ball revelations </a> 
The potential for a correction is not only being flagged by traditional market experts. Mike Novogratz, head of digital crypto bank Galaxy Digital, has also <a href="https://seekingalpha.com/news/4317285-galaxy-ceo-there-will-be-a-correction-in-bitcoin-but-100k-is-inevitable" target="_blank" rel="nofollow">expressed caution</a> amid Bitcoin’s surge. He warned that the crypto community is “levered to the gills, and so there will be a correction,” adding that leveraged stocks, such as MicroStrategy, could also experience significant downturns. 
Placeholder partner Chris Burniske also <a href="https://crypto.news/ex-ark-invest-analyst-warns-against-overhyping-10t-crypto-market-cap-targets/" target="_blank">urges a cautious approach</a>, advising investors to balance optimism with realism to avoid overhyping market targets. Reflecting on past cycles, Burniske cautioned that Bitcoin’s brief surge past $100,000 may not be sustainable in the short term. He pointed to the 2021 bull market, where inflated expectations fell short, with Bitcoin capping out at $70,000 instead of the anticipated $100,000. 
 Read more: <a rel="" href="https://crypto.news/bitcoin-breaks-100k-whats-next/"> Bitcoin breaks $100K: What’s next for Ethereum, altcoin season and key levels to watch </a>

Bitcoin’s surge signals potential market ‘overshoot,’ BofA strategist warns

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