Analyst at Bloomberg Sound the Alarm, Predicts ‘Ugly’ Times Ahead for Bitcoin and Cryptocurrencies

Mike McGlone, senior macro analyst at Bloomberg Intelligence, predicts a gloomy second half of the year for Bitcoin (BTC) and the cryptocurrency markets.

According to McGlone, who predicts an impending economic slump, risk assets, such as equities and cryptocurrency, may become inexpensive in the coming months.

The macro analyst is concerned that Bitcoin and other cryptocurrencies may suffer if the Federal Reserve continues on its current course of interest rate hikes.

During downturns, risky investments may be a good deal. Risk assets may face resistance due to the cat-and-mouse game between the surging stock market and vigilant central banks. Cryptocurrencies are very volatile, and the fact that the Bloomberg Galaxy Crypto Index (BGCI) has yet to break above its 2018 high in 2023 may be because the Federal Reserve is still raising interest rates.

The BGCI follows the price changes and market cap of the most liquid USD-traded cryptocurrencies. McGlone adds that the Bloomberg Economics team expects the year’s second half to be “ugly” for cryptocurrencies and stocks.

Our graph displays a unique divergence with the Nasdaq 100 Stock Index breaching higher and the BGCI declining in (Q2).

Rising rate-hike expectations and a rising stock market may place a cap on cryptocurrency values as measured by Federal funds futures in one year (FF13).

There may be a change in the bias towards what is expected during recessions since the BGCI has risen by approximately 50% in 2023 through June 1, and the Nasdaq has risen by 30%.

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