Bitcoin at Extreme Discount Right Now, Says Senior Bloomberg Strategist

Mike McGlone, in his analysis of the current situation prevailing on financial markets, describing the extreme negativity ahead of the Fed's rate decision, pointed to the extremely low level of the two safest assets at the moment, Bitcoin and U.S. treasuries. The expert, who is a Senior Commodities Analyst at Bloomberg Intelligence, used the word "discount" in reference to the current prices of these assets in his statement.

One Way Out vs. the Fed? Facing a #Fed sledgehammer, it's unlikely to get though the rest of this year without more significant asset-price drawdowns. The world's most speculative, excessive and safest assets -- #bitcoin and US T-bonds -- have dropped to extreme discounts. pic.twitter.com/NOnEpzGcVG

— Mike McGlone (@mikemcglone11) September 21, 2022

Earlier, McGlone signaled that the market's main cryptocurrency had bottomed out, while noting that pressure on the market still remains due primarily to the energy crisis and high oil prices, directly impacting inflation in the country.

At the moment, Bitcoin is trying to get a foothold in the $19,000-19,500 block. Crypto market participants are waiting for the Fed meeting and preparing for increased volatility. There is a suggestion that the market has already factored in 0.75% and, therefore, if the Fed announces precisely that, BTC could start to rise. In the event of a 1% interest rate hike, however, the market is laying down a strong decline.

What about the Fed?

Nevertheless, today's Fed meeting is not so much about the rate hike as it is about the updated forecasts. It is the latter that will determine how high the regulator will raise rates in the future and what will happen to the economy afterwards.

As for Mr. Powell's speech, the focus is likely to be on the need to tackle rising consumer prices. Judging by yesterday's drop in the U.S. stock market and crypto market, no dovish rhetoric is expected from the Fed chief. This is not good news for cryptocurrencies, which are unfortunately tightly correlated with the U.S. economy.