Bitcoin’s plummet to a low of $15.5K in 2022 caused chaos in the market. Thankfully, this trend wasn’t carried on to this year. As Bitcoin was seen aiming for $24K, Mike McGlone, senior macro strategist at Bloomberg Intelligence instilled fear among investors.
Appearing in a recent interview, McGlone raised the prospect of not just the cryptocurrency market, but even the stock market, plummeting. This downfall will be linked to the economic downturn which could trigger a recession. Even though Bitcoin has been endorsed as a hedge against inflation, it is expected to take a hit during a recession.
Earlier this month, the World Bank highlighted the possibility of a global recession in 2023. The Bank also pointed out that “slowdowns in advanced economies” would be seen. While this brought about anxiety among individuals, JP Morgan’s Strategist Mike Bell noted the importance of a recession. He considers that no recession would force the Fed raise rates considering the current wage growth.
As mentioned earlier, Bitcoin started 2023 on a fairly good note. However, McGlone believes that the latest rally is unsustainable. Comparing BTC with stocks he said,
“But up 40% in the year is dicey versus NASDAQ up 10%. Even this morning Bitcoin since Friday is up a fraction and everything is lower. So that’s a good sign of that [divergence] happening. But if I’m right about this typical recession, earnings drop 25%. That’s very mild. It’s normal. It happens. S&P drops maybe 50% from its all-time high. That’s very normal. Then we’re going to have a problem in all cryptos.”
McGlone wasn’t the only one.
Is Bitcoin veering towards “maturation”?
Speaking about Bitcoin’s current condition, McGlone said that the asset had remained under the 200-week moving average for quite some time. However, now “it’s bumping up against it.” Further elaborating on the same, he added,
“And that’s the difference. That’s what’s changed. That’s maturation. It’s great. We’re going to be talking about this more in the future. It’s also showing signs of divergence strength and becoming more of a, maybe, risk-off asset.”
While Bitcoin is currently trading for $23,093.37, McGlone asserted that he is bullish. However, he suggested, “fully expect Ethereum is going to continue to outperform.” ETH, at press time, was priced at, $1,581.90.