Mike McGlone, a senior commodities strategist at Bloomberg Intelligence, has expressed a bearish outlook on Bitcoin, suggesting that its potential for further price appreciation may have peaked. He forecasts a possible downturn that could see Bitcoin's value drop to around $10,000.
McGlone points to the expansive monetary policies enacted during 2020 and 2021 as a period that may have represented the zenith for Bitcoin, which has not surpassed its all-time high of approximately $69,000 recorded in 2021 since June 2nd. Despite traditional stock markets reaching new heights, Bitcoin has struggled to maintain its previous momentum.
According to McGlone, the recent surge in Bitcoin's price gave rise to numerous competing cryptocurrencies, which may dilute its status as a unique store of value. He emphasizes that Bitcoin's performance is increasingly tied to the risk appetite of investors in the stock market, as illustrated by its rising correlation with the S&P 500 index. This correlation, which was about -0.10 in 2019, has now increased to approximately 0.60 as of July 10th.
McGlone questions how Bitcoin would react should there be a pullback in high-risk assets like the S&P 500, indicating that a significant drop could be imminent. He reflects on Bitcoin's original characterization as “digital gold,” suggesting that it has now become just another asset among countless tokens that can be produced indefinitely.
This is not investment advice.
