In a recent post, Mike McGlone, senior commodity strategist at Bloomberg, warned that Bitcoin, the flagship cryptocurrency, could be leading the reversion of risk assets.
Its underwhelming performance since March has been gaining companions from the stock market as well as the commodities sector.
Yuri MolchanEarlier this year, McGlone predicted that gold could end up outperforming Bitcoin due to macroeconomic factors.
While this was not the case, gold recently managed to hit a new all-time high.
Meanwhile, Bitcoin is struggling to recover after its recent price plunge.
Earlier this month, McGlone stated that the Bitcoin hangover might be "enduring" due to the unique combination of U.S. ETF launches and a supply cut in the first quarter that pushed the cryptocurrency to record highs.
On Sunday, the leading cryptocurrency reclaimed the $60,000 level. However, it is still far from regaining its current record high that was achieved in March.
"Born of the financial crisis and quantitative easing, Bitcoin has led most risk assets to this year's highs and may be doing the same on the way back down," he said in another recent post.
Earlier this month, McGlone also pointed out that Bitcoin had dropped below its upward-sloping 200-day moving average, which suggests that risk assets could be rolling over.
At press time, the leading cryptocurrency is trading at $59,611 on the Bitstamp exchange.
The Fed's upcoming rate cut is supposed to inject bullish optimism. However, it remains to be seen whether it will manage to put the ball back in the bulls' court. Traders now believe that the Fed will go with a smaller-than-expected rate cut.
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Dan Burgin
Vladislav Sopov