Mike McGlone of Bloomberg Intelligence, said Federal Reserve policy means markets will see a long-awaited show of comedy up to a fifth.
Market News
Bitcoin (BTC) will soon cease to be a risk asset and investors should prepare for a fresh price correction, one of Bloomberg’s most popular analysts has said.
In an appearance on the Wolf of All Streets podcast on January 18, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, sounded the alarm about the markets’ “just bullish” narrative. Global.
McGlone: Bitcoin Crypto Bet ‘Last Risky’
As Bitcoin struggles in 2022, those hoping for a strong return to form will be disappointed by McGlone’s mid-term forecast.
According to him, the US Federal Reserve will ensure an end to infinite gains in equities – and cryptocurrencies, naturally correlated, will also suffer.
“The number one theme I’ve been using for months now is ‘Don’t go against the Fed,'” he began.
“If you are a long-risk asset, you are against the Fed and crypto is the riskiest asset. The important thing, remember, is that Bitcoin is the least risky of all cryptocurrencies.”
As the Fed tries to rein in inflation and dramatically reduce asset purchases, the outlook for riskier assets in the short-term will therefore be much less attractive. For McGlone, however, there is a catch when it comes to Bitcoin’s inherent allure.
“I think it is transitioning from risky assets to risky assets,” he continued, adding that he “thinks Bitcoin is going to do better” after a period of policy volatility.
“Here is my prediction: the market eventually recovers and we get a 10-20% correction in the stock market. All correlations are one, that’s usually how it works. Bitcoin coming out will be better for it.”
The Fed struggles with its balance sheet
McGlone, who is known for his bullish bias towards Bitcoin in the past, is meanwhile not alone in his caution.
Related: Analysts warn that Bitcoin could drop to $38k ‘before final breakout’
As Cointelegraph reported, even Bitcoin traders themselves are bracing for the test of time ahead, while the analyst’s view has been taken by Arthur Hayes, the former CEO of the trading platform. derivatives BitMEX, repeat earlier this month.
He writes about the Fed’s balance sheet in a blog post on policy and Bitcoin.
“Since M2% growth stalled, Bitcoin has been trading sideways. If M2 is set to % – and possibly even negative – in short order, the natural conclusion is Bitcoin (without any asymptotic growth in the number of users or transactions processed). over the network) is also much less likely. “
An accompanying chart highlights the effects of a much more conservative climate.
