Bitcoin's Vulnerability to '800-Pound Gorilla' Downside Risk, Warns Bloomberg Analyst Mike McGlone – Discover His Price Targets

Bloomberg Intelligence's Senior Macro Strategist, Mike McGlone, Raises Concerns Regarding the Value of Bitcoin (BTC).

In a recent Understanding Macro interview, McGlone highlights the evolving monetary policy landscape that Bitcoin is currently navigating, transitioning from an era of historically low-interest rates to one of rising interest rates.

According to the macro analyst, Bitcoin's price is currently undergoing a process of reversion.

"The crucial factor here is the 800-pound gorilla - the Federal Reserve's ongoing tightening. I believe this reversion process is already underway."

When interest rates rise, assets with higher risk profiles like Bitcoin tend to lose appeal, as investors are drawn to relatively safer assets that offer greater returns, such as government securities.

McGlone suggests that as a result, Bitcoin may see a drop of more than 5% from its current level, potentially triggering a broader flight from other risk assets.

"I believe it's at risk of falling below $25,000, potentially dragging down the broader spectrum of risky assets along with it."

Regarding Bitcoin's future trajectory, the Bloomberg Intelligence analyst notes,

"The price surge in Bitcoin was excessive, a pattern we've also observed in Amazon's stock and other risk assets. I anticipate it will continue to serve as a leading indicator. At some point, I expect Bitcoin to shift its behavior and trade more akin to gold and treasury bonds. We've witnessed an upward movement this year, but it appears to be rolling back down."

As of the time of writing, Bitcoin is valued at $26,778.


Sep 22, 2023

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