Bloomberg Strategist: Bitcoin's Revival Tied to Stock Market Downturn - Key Reasons Explained

Bloomberg Intelligence's top macro strategist suggests that a downturn in risk assets, including stocks, might be a precursor to a Bitcoin (BTC) resurgence.

Bloomberg Analyst's Take on Bitcoin Amidst U.S. Federal Reserve Actions

Mike McGlone, a renowned analyst from Bloomberg, shared insights on Bitcoin's performance relative to the U.S. Federal Reserve's monetary actions in a recent discussion with crypto enthusiast Scott Melker. He emphasized Bitcoin's tendency to excel when the liquidity pump is active and wane when it's inactive.

Drawing on recent data, McGlone noted, "When comparing Bitcoin with the Nasdaq, it generally thrives with an active liquidity pump. Currently, with Fed fund futures indicating roughly 5% in a year, prospects for reigniting this liquidity seem dim."

In a separate note to his sizable audience of 59,800 on social platform X, McGlone speculated on the Federal Reserve's future course. "Given the stubborn nature of inflation metrics, the Fed's shift to liquidity infusion appears remote. However, a potential trigger for change could be a downturn in the currently robust stock market."

Highlighting Bitcoin's extraordinary trajectory, the Bloomberg expert pointed out the cryptocurrency's 26,000x appreciation over a 12-year span. He further commented, "Even if Bitcoin were to drop by over 63%, descending to around $10,000, its stellar growth record remains intact."

Currently, Bitcoin is trading at $27,711, marking a 6% rise in the past day.

Key Takeaways:

Bitcoin's performance is seemingly tied to the U.S. Federal Reserve's liquidity actions.
Mike McGlone emphasizes the potential of the stock market's downturn to influence the Fed's decision.
Bitcoin maintains an impressive growth record despite potential fluctuations in its value.

Aug 30, 2023

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