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Top Bloomberg Analyst Gives Ominous Bitcoin Prediction

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Wed, 3/05/2023 - 16:00
Top Bloomberg Analyst Gives Ominous Bitcoin Prediction
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Mike McGlone, a senior macro strategist at Bloomberg Intelligence, has issued a rather dark prediction for the cryptocurrency market. He believes that cryptocurrencies may be the next assets to suffer in a deflationary crisis, as evidenced by the sharp decline in commodity prices and bank deposits. While most assets, including cryptocurrencies, experienced a year of recovery in 2022 following the pandemic-induced recession, McGlone warns that a deflationary bust may be looming.

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According to the analyst, the first recession experienced by Bitcoin in the United States may present a significant challenge. If the broader stock market follows the trend of banks, cryptocurrencies may also face a downturn. A comparison of the KBW Bank Index's decline with the S&P 500 and Bitcoin's rise reveals that these trends are unsustainable.

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McGlone suggests that there is hope for a soft landing if the bank gauge rebounds and signals a revival in risk assets. However, he warns that the situation could worsen, much like during the previous recession. During the 2008 financial crisis, the bank index plummeted by approximately 85%, whereas it has currently fallen by only about 50% from its peak in 2022. However, McGlone notes that as of May 2023, the Federal Reserve is still tightening its policies.

In summary, despite BTC being considered the least risky cryptocurrency, McGlone's analysis suggests that its future may not be as bright.

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