Bloomberg analyst Mike McGlone has called Bitcoin (BTC) a “wild card” that is “ripe” to outperform once traditional stocks finally bottom.
In a Sept. 7 post on Linkedin and Twitter, McGlone explained that while Fed tightening will likely set the direction of the stock market, Bitcoin remains a “wild card” that could buck the trend, stating:
“Bitcoin is a wild card that’s more mature to outperform when stocks are down, but transitions more like gold and bonds.”
The commodities strategist shared further details in a Sept. 7 report, which noted that Bitcoin was poised to stage a strong rebound from the bear market, despite “strong headwinds” toward risky assets:
“Usually it’s a matter of time before the Fed fund gauge flips toward cuts, and when it does, Bitcoin is poised to be a major beneficiary.”
The report notes that while Bitcoin would follow a similar trend to government bonds and gold, Ethereum (ETH) “may show a higher correlation with stocks.”
The Federal Reserve’s intensified quantitative tightening comes amid several large rate hikes throughout 2022, with the most recent spike being a 75 basis point rise on July 27th.
Macro on five charts: Crude Oil, Commodities, Stocks, Bonds, Bitcoin – #Crudeoil could resume an ongoing bear market and fuel the T-Bond bull. A tightening of the #FederalReserve as global GDP turns negative could help shift #stocks to fall on bad news and rise on good. pic.twitter.com/KZEWsZyI8h
— Mike McGlone (@mikemcglone11) September 7, 2022
While it’s not known exactly when the Fed’s quantitative tightening will end, some economists predicted the end point would begin “sometime in 2023,” according to a Bloomberg article published in August.
Quantitative tightening is a contractionary monetary policy tool used by central banks to reduce the level of money supply and liquidity in an economy, which restrains spending in all markets, such as the US. B. shares can reduce.
Related: Bitcoin is likely to become a risk-free asset in the second half of 2022, says Bloomberg analyst
But despite Bloomberg’s optimistic view, other experts believe that Bitcoin and the stock markets are actually more correlated than before.
Cointelegraph contributor Michaël van de Poppe recently said the correlation between the S&P 500 index and BTC is approaching 100%, while a number of IMF economists have claimed a 10x increase in the correlation between cryptocurrencies in some regions of the world. and to have seen stock markets .
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