The Bitcoin (BTC) price will soon no longer be a risk object and investors should brace themselves for another price correctionsays one of Bloomberg’s most prominent analysts.
During an appearance on the podcast “Wolf of All Streets” on January 18 Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, sounded the alarm about the “all up” narrative for global markets..
McGlone: Bitcoin is the least risky crypto bet
As Bitcoin Struggles in 2022, those hoping for a dramatic return to form will be disappointed by McGlone’s mid-term forecast.
The US Federal Reserve, it is said, will effectively guarantee the end of unlimited profits for stocks, and the naturally correlated cryptocurrencies will also suffer.
“The number one theme I’ve been using for months is ‘Don’t fight the Fed'”, started.
“If you have risky assets for a long time, you fight the Fed, and cryptocurrencies are the riskiest assets. The key, remember, is that Bitcoin is the least risky of cryptocurrencies.”
As the Fed tries to curb inflation and limit asset purchases, For short-term risk assets, the prospects are far less attractive. For McGlone, however, there is a silver lining when it comes to Bitcoin’s inherent appeal..
“I think it’s going from a risky asset to a risky asset,” he continued., adding that “I think bitcoin will fare better” after the period of political turmoil.
“Here’s my prediction: Markets will pull back at some point and we have a 10-20% correction in the stock market. All correlations are one, that’s how it usually works. Bitcoin is doing better for it.”
The Fed is struggling with its balance sheet
McGlone, famous for his bullish views on Bitcoin in the past, he is far from alone in his caution.
As Cointelegraph reported, Even bitcoin traders themselves are preparing for the upcoming testing times, while the analyst’s views were echoed earlier this month by Arthur Hayes, the former CEO of derivatives trading platform BitMEX.
“Loose monetary conditions in the US have definitely played a role in the meteoric rise in prices (albeit with a few months lag)”, wrote about the Fed balance sheet in a blog post on politics and bitcoin.
“Since M2% growth stalled, bitcoin has traded sideways. If M2 hits 0% for the foreseeable future — and possibly even turns negative — the natural conclusion is that Bitcoin (in the absence of asymptotic growth in the number of users or transactions processed through the network) is likely to go much lower, too. “
An accompanying chart highlights the impact of a much more conservative environment.