Bloomberg Strategist Warning Down Risk For Bitcoin In The Near Time
- Crypto has a number of challenges, according to Mike McGlone, a senior macro analyst at Bloomberg.
- He believes that Bitcoin’s worst is yet to come, citing current patterns, fundamental reasons, and the Federal Reserve’s bias.
- Moreover, McGlone questions Bitcoin’s capacity to weather a slowdown in the US economy, citing the cryptocurrency’s youth and status as a high-risk asset.
According to Bloomberg’s Senior Macro Strategist Mike McGlone, cryptocurrencies face a number of challenges, including the possibility of a US recession, a stock market crash, watchful central banks, and high interest-rate competition.
McGlone forecasts further suffering for Bitcoin (BTC) and the larger cryptocurrency sector in his newest report, “Crypto Outlook, June 2023.” He contends that, notwithstanding a price recovery in 2023, the risks for the Bloomberg Galaxy Crypto Index remain skewed negative. These facts, together with the speculative excesses that led to the 2021 high, indicate that the crypto market’s forecast is gloomy.
McGlone notes that Bitcoin’s weakness in May, along with copper and Chinese stocks, is exceptional when contrasted to the robust Nasdaq 100 Stock Index. Although the Nasdaq has the capacity to raise all boats, it may clash with the Fed’s still-rising rate-hike expectations.
Moreover, McGlone believes that BTC, which is sometimes referred to as digital gold because of its perceived role as a store of value, may be unable to beat the conventional safe-haven asset in the event of a US economic slowdown. This is due to the fact that BTC is still in its infancy in comparison to gold, which has been used as a store of value for thousands of years. As a consequence, during times of economic uncertainty, investors may go toward gold rather than emerging assets like Bitcoin.
According to McGlone, the month of June will indicate if the first half’s bias for growing risk assets, such as Bitcoin, will persist or whether it will lead to a U.S. recession. The analyst favors the latter possibility, noting the market’s upbeat outlook as a consequence of the continuous aggressive central bank rate rises. Moreover, considering current patterns, underlying reasons, and the Federal Reserve’s bias, he warns that the worst may not be over for BTC.
The expert highlights the grounds for future BTC price declines, pointing out that the cryptocurrency traded near $7,000 at the end of 2019 before witnessing a big liquidity pump, raising worries about possible reversion risks.
McGlone’s gloomy projection casts doubt on Bitcoin’s rebound and raises serious concerns about the currency’s future direction. While the crypto market navigates the difficult terrain, it remains to be seen whether McGlone’s thesis is correct or whether BTC will defy the odds and resume its positive momentum.
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