Bloomberg Analyst: Bitcoin Reflects 1930's Market Crash, Century-Old Tech Evolution Patterns.

Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, draws parallels between Bitcoin's (BTC) decade-long meteoric rise and the 1929 stock market bubble.

Drawing parallels between the current high-interest rate environment and historical events, McGlone highlights how Bitcoin's trajectory resembles the 1930 stock market scenario. He shares a graphic illustrating the peak of the US discount rate in 1929, mirroring the 100-week moving average trend of the Dow Jones Industrial Average (DJIA). This rate denotes the interest charged on Federal Reserve loans to banks. The graphic further reveals Bitcoin's downtrend in its 100-week moving average, coinciding with a sharp rise in the Fed's interest rate over the past year. This comparison serves as a reminder of the historical significance as statistician and entrepreneur Roger Babson forewarned about inflated equity prices before the 1929 crash, paralleling the stance taken by the Fed in the current context.

Source: Mike McGlone/X

McGlone highlights Bitcoin's birth resembling technological advancements from around a century ago, like electricity, cars, air travel, and telephones. According to Bloomberg's analyst, Bitcoin's parabolic rise and 1920s' innovative emergence align with the era of low interest rates by the Federal Reserve.

"What's Bullish About This? Downtrend, Fed Hiking…

The convergence of revolutionary technologies, exponential price surges, ample liquidity, and speculation mirrors Bitcoin's similarity to the stock market as it approached the 1929 peak. A significant divergence is the Federal Reserve Bank of New York's move to reduce rates in 4Q29 amidst plummeting equity prices.

Source: Mike McGlone/X

As of the current moment, Bitcoin is being traded at a price of $26,020.

Aug 23, 2023

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