Bitcoin to strengthen after stocks drop ‘10%-20%’ – Bloomberg analyst

Bitcoin (bitcoin) will soon cease to be a risk asset, and investors should brace for a new price correction, said one of Bloomberg’s best-known analysts.

in an appearance wolf of all streets On the January 18 podcast, Mike McGlone, senior commodities strategist at Bloomberg Intelligence, raised the alarm The claim that global markets “only go up”.

McGlone: ​​Bitcoin’s ‘least risky’ cryptocurrency bet

Those hoping for a big comeback will be disappointed by McGlone’s medium-term forecast as Bitcoin struggles in 2022.

He said the U.S. Federal Reserve will all but guarantee an end to unlimited gains in stocks — and naturally related cryptocurrencies will also be affected.

“The overarching theme I’ve been using for months is ‘don’t fight the Fed,'” he began.

“If you’re long risk assets, you’re fighting the Fed, and cryptocurrencies are the riskiest assets. Remember, the point is that Bitcoin is the least risky of the cryptocurrencies.”

The short-term outlook is much less attractive for risk assets as the Fed tries to rein in inflation and slash asset purchases. For McGlone, however, there is a silver lining in Bitcoin’s inherent appeal.

“I think it’s shifting from a risk asset to a risk asset,” he continued, adding that he “thinks bitcoin is going to get better” after a period of policy turmoil.

“Here’s my prediction: the market will eventually pull back and the stock market will see a 10% to 20% correction. All correlations are one, and that’s usually how it works. Bitcoin is doing better.”

Fed fights balance sheet

At the same time, McGlone, who has been known for his Bitcoin bullishness in the past, is not alone in treading carefully.

related: Analyst warns Bitcoin could fall to $38,000 ‘before final breakout’

As Cointelegraph reported, even Bitcoin traders themselves Prepare for future testing times, while analysts’ views were echoed earlier this month by Arthur Hayes, the former CEO of derivatives trading platform BitMEX.

“Easy monetary conditions in the U.S. definitely affected the meteoric rise in prices (albeit delayed by a few months),” he said. wrote About the Fed’s balance sheet in a blog post about policy and Bitcoin.

“Bitcoin has been trading sideways due to stagnant growth in M2%. If M2 is set to reach 0% in the short term (maybe even become negative), the natural conclusion is that Bitcoin (number of users or transactions processed through the network) without any asymptotic growth in the number of deals) could also be much lower.”

The accompanying chart highlights the impact of a more conservative atmosphere.