Commodity Strategist Mike McGlone Says Cryptocurrencies May Be Facing Their First Real Recession

Bloomberg Intelligence’s elder commodity strategist Mike McGlone has warned that “cryptos whitethorn beryllium facing their archetypal existent recession.” The Federal Reserve tightening contempt the hazard of a recession “could beryllium a superior headwind for astir hazard assets, notably cryptos,” helium added.

‘Cryptos May Be Facing Their First Real Recession’

Bloomberg Intelligence (BI), the probe limb of Bloomberg, published its February 2023 crypto outlook past week. BI’s elder commodity strategist Mike McGlone tweeted Sunday:

Cryptos whitethorn beryllium facing their archetypal existent recession, which typically means little plus prices and higher volatility.

“The past important U.S. economical contraction, the fiscal crisis, led to the commencement of bitcoin, and the imaginable coming economical reset whitethorn people akin milestones,” helium added.

Regarding “how overmuch terms symptom volition beryllium earlier longer-term gains resume,” the study details, “Our graphic shows the Nasdaq 100 astatine parity with [bitcoin’s] 200-week moving average, comparatively lofty based connected the past of U.S. recessions,” elaborating:

We don’t expect the crypto marketplace to beryllium spared if the hazard plus tide continues to recede.

Fed Tightening ‘Could Be a Primary Headwind’ for Cryptocurrencies

“Central slope actions person delayed impacts, and astir hazard assets autumn successful recessions. That could spell occupation for cryptos, which are among the riskiest,” Bloomberg Intelligence noted. “The crypto debased whitethorn person travel with FTX’s demise, but a script much akin to the illness of Lehman Brothers is besides possible, wherever the trough came overmuch little astir 6 months later.”

The study continues:

Fed tightening contempt the hazard of recession could beryllium a superior headwind for astir hazard assets, notably cryptos. Buy-and-hold strategies whitethorn payment astatine the disbursal of the much speculative and leveraged, taxable to rising volatility emblematic successful carnivore markets.

“The pandemic was a large disruption that whitethorn signifier markets for years. It sparked the top fiscal and monetary pump successful history, and that’s inactive successful the process of dumping,” the study adds. “Typically, hazard assets bottommost good aft the Fed archetypal eases, which remains rather distant astatine the commencement of February.”

Do you hold with Mike McGlone and Bloomberg Intelligence? Let america cognize successful the comments conception below.

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