2026 Bubble Will Ultimately Burst! Top Economist: Stock Market Drops 90%, Bitcoin Falls to 30,000

HS Dent Investment Founder Harry Dent Warns that the most severe market crash in history will arrive in 2026. He predicts that the current super bubble, which has lasted nearly 17 years, will burst, leading to a 90% decline in the stock market, described as the worst market environment since the Great Depression. Dent forecasts that by the end of 2026, Bitcoin could fall to $30,000, with downside potential as low as $15,600.

The 17-Year Super Bubble Has Never Truly Cleared

Harry Dent traces the start of this cycle back to the period after the 2008 financial crisis and believes that policymakers prevented the natural reset of the economy through monetary interventions. Dent says, “But this bubble is different because it inflated rapidly from 2009 onwards, without allowing a recession to fully clear debt and various issues; it just took off directly and has continued to this day.”

This view reveals the most fundamental vulnerability of the current market. Historically, each economic crisis has required a period of adjustment to clear excessive leverage, dispose of bad assets, and restore market balance. After the 1929 crash, the US experienced a decade-long Great Depression before the market fully cleared. After the dot-com bubble burst in 2000, the Nasdaq took 15 years to regain its high.

But the handling after the 2008 financial crisis was entirely different. The Federal Reserve launched quantitative easing (QE), lowering interest rates to near zero, and the government implemented large-scale fiscal stimulus. While these policies avoided a severe economic contraction, they also prevented the market’s natural clearing process. Zombie companies (those surviving only due to low interest rates) proliferated, asset prices were artificially inflated, and debt levels continued to grow.

Dent emphasizes that the global economy should have experienced a longer downward adjustment similar to the 1930s, but aggressive deficit spending accelerated the expansion. This “drinking poison to quench thirst” policy created an unprecedented super bubble across all asset classes, including stocks, real estate, and digital assets. When this bubble finally bursts, the crash will be far more severe than in 2008 because the accumulated problems are more serious, and market distortions are more extreme.

This analysis dismisses the idea that “speculative overheating is limited to AI.” Today, AI has become a key topic in market valuation discussions, with many analysts believing that as long as the AI bubble doesn’t burst, the broader market can remain stable. However, Dent states that stocks, real estate, and digital assets are all deeply embedded in a debt-driven super bubble, with AI merely the most conspicuous part of this bubble, not the whole.

Bitcoin and Nvidia: The Dual Leading Indicators for the 2026 Crash

The discussion mentions Bitcoin, viewing it as the clearest signal of broader market decline. Specifically, “digital gold” has fallen about 30% from its recent high, and analysts believe this trend is consistent with previous cycle peaks. Dent says, “Bitcoin is the best leading indicator. The second indicator we have now is Nvidia.”

Dent points out that historically, Bitcoin has never reached a new high after its four-year cycle peak. Each time, it has fallen at least 77% in subsequent years. Based on this pattern, he predicts Bitcoin could drop to $30,000 by the end of 2026, with downside potential as low as $15,600—levels not seen since 2022.

This forecast is not baseless. Bitcoin’s four-year cycle is closely related to its halving mechanism. Historical data shows that the year following a halving is usually a bull market peak, and the third year often enters a bear market. The last cycle peaked in 2021, entered a bear market in 2022, and with the halving-driven speculation, reached a high again in 2025. According to this pattern, 2026 could mark the start of a new bear market.

As the second leading indicator, Nvidia also warrants attention. While acknowledging AI’s disruptive potential, Dent warns that AI stocks are exhibiting typical late-bubble characteristics. He compares Nvidia to Cisco during the dot-com bubble’s peak—when key infrastructure and breakthrough technologies became speculative hotspots. Cisco hit $80 per share in March 2000, then plummeted over 80%, taking 15 years to recover to its high.

Four Core Arguments for the 2026 Crash

1. Debt-Driven Super Bubble Has Never Cleared

· 17 years of asset price inflation since 2009

· Quantitative easing and fiscal stimulus prevented natural market reset

· Large numbers of zombie companies, debt levels continue to expand

2. Historical Patterns of Bitcoin Point to a Crash in 2026

· Never reached a new high after its four-year cycle peak

· At least 77% decline after each cycle top

· Target price of $30,000 or even $15,600

3. AI Stocks Show Late-Bubble Characteristics

· Nvidia compared to Cisco during the internet bubble peak

· Key infrastructure becomes a speculative focus

· Valuations detached from fundamentals

4. January 2026 Is a Decisive Moment

· Performance in the first week and month of January predicts the year’s trend

· Weak January will confirm a bearish outlook

· Only a few weeks left in the timing window

January 2026 Will Decide Life or Death

Looking ahead, Dent states that early 2026—especially January—will be a critical period to determine whether the bubble finally bursts or if the extension continues for another year. Based on historical experience, strong performance in the first week and month of January often signals a bullish year; conversely, weak January results further confirm his bearish outlook.

This “January effect” is a widely studied market anomaly on Wall Street. Data shows that when the S&P 500 posts positive returns in January, the odds of a positive year exceed 80%. When January declines, the year’s performance tends to be weak. The underlying logic includes portfolio rebalancing at the start of the year, tax considerations, and self-reinforcing market sentiment.

Dent emphasizes that every major speculative bubble ends in catastrophic losses, and he believes this time will be no different. He says, “Bubbles will eventually burst, and this one has already become absurd.” This judgment is based on the historical extremity of bubble size. Currently, the US stock market’s total market cap to GDP ratio (the Buffett indicator) exceeds 200%, far above the 150% at the peak of the 2000 internet bubble and the 110% before the 2008 financial crisis.

Dent concludes that the only asset likely to “survive” is US Treasuries, “because they can print money to pay them off.” This view differs from some other well-known economists, including Peter Schiff. Schiff recently predicted an unprecedented dollar collapse in 2026. Such disagreements among experts highlight the high uncertainty for 2026—whether it’s a dollar crash or a stock market crash, investors should prepare for extreme scenarios.

For ordinary investors, Dent’s warning offers an important risk alert. If his prediction proves correct, 2026 will be a year of massive wealth redistribution. Those who reduce holdings early, hold cash or Treasuries will preserve capital and even buy the dip after the crash. Those still heavily invested in stocks or crypto may face catastrophic losses of 70-90%.