Bitcoin is a wildcard destined to outperform —Bloomberg analyst

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Bloomberg analyst Mike McGlone called Bitcoin (BTC) a “wildcard” that is “ripe” to outperform once traditional stocks bottom out.

In a September 7 post on Linkedin and Twitter, McGlone explained that while US (US) Federal Reserve tightening is likely to determine the direction of the stock market, Bitcoin remains a “wild card” that could turn the tide. , stating:

“Bitcoin is a wildcard that’s more ripe to outperform when stocks are bottoming, but is moving to look more like gold and bonds.”

The commodity strategist shared more details in a September 7 reportwho noted that Bitcoin was poised to rebound strongly from the bear market despite a “strong headwind” towards high-risk assets:

“It’s usually a matter of time for the fed funds gauge to turn to cuts, and when it does, Bitcoin is poised to be the biggest beneficiary.”

The report notes that while Bitcoin would follow a similar trend to Treasuries and gold, Ethereum (ETH) “may have a higher correlation with equities.”

The increased quantitative tightening by the Federal Reserve comes amid several major interest rate hikes throughout 2022, with the most recent peak representing a 75 basis point increase on July 27.

While it’s unclear exactly when the Fed’s quantitative tightening will end, some economists have predicted the end point will begin “sometime in 2023” according to a Bloomberg. article published in August.

Quantitative tightening is a restrictive monetary policy tool used by central banks to reduce the level of money supply and liquidity in an economy, which can reduce spending in markets, such as stocks.

Related: Bitcoin is likely to shift to a risky asset in the second half of 2022, according to Bloomberg analyst

But despite Bloomberg’s bullish stance, other experts believe Bitcoin and equity markets have actually become more correlated than before.

Cointelegraph contributor Michaël van de Poppe recently said that the correlation between the S&P 500 and BTC was approaching 100%, while a number of IMF economists claimed to have seen a 10-fold increase in the correlation. between the crypto and equity markets in certain regions of the world. .

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