Mike McGlone declares Bitcoin a Wild Card that will outperform stocks
Despite the ongoing bear market and the decline in the price of bitcoin, some analysts still retain confidence in Bitcoin. Bloomberg analyst Mike McGlone is one of them. He took to Twitter on Wednesday to express his thoughts on the most popular cryptocurrency.
The analyst strongly believes that Bitcoin will bounce back from the bear market. McGlone posted his thoughts on the latest Bitcoin price moves on LinkedIn and Twitter. He raised the tightening of the US central bank as a decisive factor for the stock market’s direction. He added that Bitcoin is a “wild card” that can defy the trend.
The Bloomberg analyst compared Bitcoin to a wildcard that is poised to perform well when stocks turn low. He added that Bitcoin is evolving to be more like gold and bonds. The report shows that while Bitcoin will be more like gold and government bonds, 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 by the Federal Reserve will be suspended. However, economists predicted that the end point would begin sometime in 2023. This statement is according to an August article published by Bloomberg.
The quantitative tightening of federal reserves began amid an interest rate hike throughout the year 2022. The term quantitative tightening is a monetary policy tool used by central banks to curb money supply and liquidity and cut spending on stocks and others.
The last increase in interest rates was an increase of 75 basis points on 27 July. It is worth noting that the BTC price rose above $22,000 in July after the Federal Reserve added another significant interest rate hike.
The rise in BTC as interest rates rose may be the basis for McGlone’s claim that Bitcoin will benefit from the projected recession.
Economists predict an increase in Cn Crypto-Equity Correlation
Disregarding Bloomberg’s strong stance, 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 claimed to foresee a 10-fold correlation in the crypto-stock market in some parts of the world.
In accordance McGlone, Bitcoin is likely to move from a risk-on to a risk-off asset in the second half of 2022. This is because the macroeconomic domain is rapidly trending towards a recession. He added that the crypto market eliminated most of the speculative booms that played out in 2021.
The market is now ripe for another rally. McGlone also noted that a rise in interest rates could lead to a global deflationary recession that would benefit BTC.
Featured image from The BBC, chart from TradingView.com
