Bloomberg Legend Mike McGlone Issues a Warning About Bitcoin—He Reveals the Condition That Will Save BTC

Bloomberg Intelligence senior commodities strategist Mike McGlone said that high equity valuations and expectations that the Fed may raise interest rates again are creating strong sell signals for Bitcoin ($BTC).

McGlone noted that Bitcoin’s performance over the past five years has been roughly on par with the S&P 500 index, but $BTC has experienced approximately three times higher volatility.

McGlone described Bitcoin as an extremely volatile and speculative digital asset, noting that $BTC exhibits a high correlation with the stock market and has to compete with millions of other crypto assets. He argued that, from a risk and portfolio management perspective, Bitcoin presents a negative picture because it offers similar returns to the S&P 500 while carrying approximately three times the volatility.

According to McGlone, Bitcoin, which emerged after the 2009 global financial crisis, could lead the market during a potential downturn, just as it did during the rise in risky assets. The analyst pointed to three key factors that increase the downside risks for Bitcoin: $BTC encountering resistance around $80,000 during its recent rise, the pricing in of approximately 70 basis points of Fed interest rate hikes over the next year in futures markets, and the S&P 500 index being at significantly higher levels compared to its 200-week moving average.