According to a well-known Bloomberg analyst, investors should prepare for a new price correction but, despite this, Bitcoin (BTC) will soon no longer be considered a risk asset.
On January 18, during an episode of the podcast Wolf Of All Streets, Mike McGlone, senior commodity strategist di Bloomberg Intelligence, ha sounded the alarm regarding the uniquely bullish narrative of global markets.
McGlone: Bitcoin is the least risky crypto bet
With Bitcoin in full fight to maintain its supports, those hoping for a strong return to the asset will likely be disappointed with McGlone’s medium-term forecast.
In his opinion, the US Federal Reserve will stop guaranteeing the rampant gains of the shares. As a result, the related crypto market could suffer.
“The golden rule that I have been spreading for months is the ‘Don’t fight the Fed’“ states, adding:
“If you are bullish on risk assets, you are rowing against the Fed, and cryptocurrencies are the riskiest assets. It is vital to remember that Bitcoin is the least risky crypto.”
Given attempts to contain inflation and slash the Fed’s asset purchase, the near-term outlook certainly remains less attractive. According to McGlone, however, when it comes to the intrinsic appeal of Bitcoin the theme takes on another aspect.
“I believe that is evolving from a risk-on asset to a risk-off asset“, he declares, adding that “Bitcoin will come out fine”, at the end of the current political upheavals.
“Here is my prediction: the markets finally retrace, with a 10% -20% correction on equities. Just as it usually works, all correlations are unique. Bitcoin will come out well.”
The Fed thwarts its balance sheet
Meanwhile McGlone, famous for his bullish views on Bitcoin in the past, is far from alone in urging caution.
Related: Analysts Warn Bitcoin Could Fall To $ 38,000 ‘Before Witnessing Eventual Breakout’
As Cointelegraph reported, there are several Bitcoin traders preparing for tough times. Similar views come from Arthur Hayes, former CEO of the BitMEX derivatives trading platform.
“The loose monetary conditions in the United States have certainly influenced the astronomical increase in the price (albeit with a few months of delay)”, declares the entrepreneur referring to the Fed’s balance sheet in a blog post about politics and Bitcoin.
“Since the growth of M2% has stopped, Bitcoin has started to lateralize. If M2 is tending to 0%, and possibly even going negative, in a short time, the consequence is that Bitcoin (in the absence of any asymptotic growth in the number of users or transactions processed through the network) falls much lower. “
The graph below highlights the implications of a much more conservative situation.
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