Bitcoin’s Future According to Bloomberg Analyst
Mike McGlone, senior macro strategist at Bloomberg Intelligence, suggests a bearish trend for Bitcoin in the near term. He observes that Bitcoin is showing signs of decline, even as other risk assets are on the rise. He warns that if a significant downturn occurs, it could affect all investors, including those in Bitcoin. However, he also notes that Bitcoin needs to show a different kind of strength in a deflationary environment, similar to treasury bonds and gold.
What Does This Mean for Cryptocurrencies?
Despite predicting a continued downtrend for Bitcoin in the event of an “economic reset,” McGlone remains optimistic about the flagship cryptocurrency’s long-term prospects. He believes that Bitcoin will eventually reach a six-figure price. This is promising for altcoins in the long run, as a five-figure price target for Bitcoin implies a fourfold increase. Considering that many cryptocurrencies have seen gains exceeding 500% this year while Bitcoin has risen by 70%, a fourfold increase could present significant profit opportunities.
Implications for Risk Assets
If McGlone’s predictions are correct, a decline in Bitcoin could potentially drag other risk assets down with it. He views Bitcoin as a great leading indicator for most risk assets, as it has been leading the recent downturn. He predicts a normal deflationary recession if a global economic reset occurs, with a return of housing and a stock market crash similar to 2008. This could be bad for crypto, as it is still drawing liquidity from the system.
In conclusion, while the short-term outlook for Bitcoin and other risk assets may seem bleak according to McGlone, the long-term prospects for Bitcoin remain promising. As cryptocurrency enthusiasts, it’s crucial to stay informed and prepared for potential market downturns while also keeping an eye on the potential for significant long-term growth.