Bloomberg Intelligence’s senior macro strategist believes that risk assets like stocks need to crash before Bitcoin (BTC) jumps back to life.
In a new interview with crypto trader Scott Melker, Mike McGlone says Bitcoin is unlikely to take flight as long as the U.S. Federal Reserve keeps the money printer off.
“Here’s what I think the indication of the bad performance is – if you look at the overlay of Bitcoin versus [the Nasdaq], it typically outperforms when the liquidity pump is on, and it typically underperforms when the liquidity pump is off.
Relevant history is more relevant because it’s such a young asset, and the point is that the liquidity pump is clearly off, and it’s way off. I just looked at Fed fund futures – in one year they’re right around 5%. That shows no hope of getting this liquidity pump to go on.”
McGlone also tells his 59,800 followers on the social media platform X that the Federal Reserve may reverse its hawkish stance if the stock market melts down.
“Here’s a potential lose-lose. It’s unlikely the Fed will be adding liquidity anytime soon due to sticky inflation metrics. A top catalyst to trigger a pivot might be a reversal in what has helped buoy rates this year – the resilient stock market.”
The Bloomberg analyst highlights that Bitcoin is up 26,000x in 12 years and that BTC would still be one of the best-performing assets even if it loses over 63% of its current value.
“Heading back toward $10,000 would still maintain Bitcoin’s unprecedented performance.”
At time of writing, Bitcoin is worth $27,711 and is up over 6% in the last 24 hours.
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