Bloomberg Intelligence senior macro strategist Mike McGlone says the second half of the year could be bearish for Bitcoin (BTC) and the rest of the crypto markets.
McGlone says risky assets, such as stocks and cryptocurrencies, could become cheap in the coming months as he believes an economic recession is on the way.
According to the macro strategist, the Federal Reserve is still moving towards rising interest rates, which he says could negatively impact the performance of Bitcoin and other crypto assets.
“Risk assets can become cheap in recessions. The cat-and-mouse game between the improving stock market and vigilant central banks could prove an obstacle for risky assets. Cryptos are among the riskiest, and the Bloomberg Galaxy Crypto Index (BGCI)’s inability to stay above its 2018 high in 2023 may have good reason: the Fed is still tightening.
The BGCI tracks the performance of the largest crypto assets traded in USD.
McGlone also says Bloomberg Economics team predicts an “ugly” second half for cryptos and stocks
“Our chart shows a rare divergence, with the Nasdaq 100 Stock Index breaking higher and the BGCI falling (Q2).
Federal fund futures in one year (FF13) are a liquidity meter, adding rising rate hike expectations to a rising stock market can cap crypto prices.
The BGCI is up about 50% through June 1 in 2023 and the Nasdaq 30%, which may shift the trend toward what is typical of recessions: risky assets can get cheap.”
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