Mike McGlone pronounces Bitcoin a wildcard that will outperform stocks

Despite the ongoing bear market and falling bitcoin price, some analysts still maintain their faith in Bitcoin. Bloomberg analyst Mike McGlone is one of them. He took to Twitter on Wednesday to share his thoughts on the most popular cryptocurrency.

The analyst firmly believes that Bitcoin will recover from the bear market. McGlone posted his thoughts on Bitcoin’s recent price playouts LinkedIn and Twitter. He has addressed the tightening of the US Federal Reserve as a determining factor in the direction of the stock market. He added that Bitcoin is a “wild card” that could defy the trend.

Bloomberg’s analyst likened Bitcoin to a wildcard that’s ready to perform well when stocks go down. She added that Bitcoin is evolving to be more like gold and bonds. The report shows that while Bitcoin will be more like gold and treasury bills, Ether may be more like stocks.

BTC will benefit from the Federal Reserve’s interest rate hike

It is not yet clear when the quantitative tightening of the Federal Reserve will be suspended. However, economists have predicted that the endpoint will begin in 2023. This claim is according to an August article published by Bloomberg.

The quantitative tightening of federal reserves began in the midst of a rise in interest rates throughout the year 2022. The term quantitative tightening is a monetary policy tool used by central banks to bring the supply of money and money under control. liquidity and reduce spending on shares and others.

The most recent rise in interest rates represented a 75 basis point rise on July 27. It is worth noting that the price of BTC jumped above $ 22,000 in July after the Federal Reserve added another significant interest rate hike.

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Mike McGlone pronounces BTC a wild card that will outstrip stocks
Bitcoin took a hit there BTCUSDT on TradingView.com

The rise of BTC as interest rates rise could be behind McGlone’s claim that Bitcoin will benefit from the expected recession.

Economists predict an increase in the Cn Crypto-equity correlation

It does not matter by Bloomberg Strong point of view, other analysts believe that Bitcoin is now more like the stock market than before.

One expert said that the relationship between the S and P 500 index and BTC tends to be 100%. Some IMF economists have said they predict a 10-fold increase in crypto-stock market correlation in some parts of the world.

According to McGlone, in the second half of 2022 Bitcoin will likely go from a risk-on to a risk-off asset. This is because the macroeconomic dominance is rapidly tending towards a recession. He added that the cryptocurrency market has eliminated most of the speculative debauchery that occurred in 2021.

The market is now ripe for a new rally. McGlone also noted that a rise in interest rates could lead to a global deflationary recession that BTC will benefit from.

Featured image from The BBC, chart from TradingView.com

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