Benzinga - Bloomberg's macro strategist Mike McGlone said Bitcoin (CRYPTO:BTC) will likely face a big test in the second half of 2023.
In a tweet on Thursday, McGlone said that after a strong first-half performance, BTC will likely have to endure tough recessionary conditions for the next six months.
#Bitcoin's 84% gain in 1H was about double that of the Nasdaq 100 and consistent in annual volatility (risk-adjusted). It's 2H who can set the benchmark #crypto as a high-beta version of the #exchange, or for its potential to be digital #gold in a world moving in that direction. pic.twitter.com/qoIcuuH91P
— Mike McGlone (@mikemcglone11) July 6, 2023
“Bitcoin's 84% 1H gain was about double that of the Nasdaq 100 and consistent in year-to-year (risk-adjusted) volatility. It is 2H who can set the benchmark crypto as a high beta version of the stock market or for its potential as digital gold in a world going in that direction,” he said.
Also Read: Analyst Says Bitcoin Is Facing This Massive Headwind As It Hovers Above $30,000
McGlone predicted that the stock market would begin to decline and Bitcoin would have a chance to prove itself as a store of value, or “digital gold,” by not plunging alongside stocks.
Mid-Year Outlook: Cryptos - The stock market continuing to post gains could shake the foundations of #cryptos. The fact that the Bloomberg Galaxy Crypto Index fell in Q2 despite the strong rebound in the Nasdaq 100 stock index suggests divergent weakness for the crypto market. pic.twitter.com/dLAq1Axpsh
— Mike McGlone (@mikemcglone11) July 6, 2023
However, McGlone warned that while the Federal Reserve has eased monetary policy quickly in past recessions, the central bank may be reluctant to do so this time due to high inflation.
“Our bias is somewhat in the middle. We believe a real test of Bitcoin is likely to occur when the stock market enters a bear market at some point, typical of US recessions,” McGlone added.
“During the two major economic contractions since the turn of the millennium, declines of around 50% in the S&P 500 have been accompanied by substantial central bank easing. That may have changed,” a- he added.
The macro strategist also pointed out that the Fed is unlikely to ease due to stubborn inflation. McGlone said, “Our chart shows Bitcoin hovering at the $30,000 pivot but lagging the Nasdaq Q2 rush.”
McGlone further tweeted that a weakening crypto market had already been on display in the second quarter of the year as stocks gained while major digital assets declined.
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“The stock market continuing to post gains could shake the foundations of cryptos. The Bloomberg Galaxy Crypto Index fell in the second quarter despite the strong rebound in the Nasdaq 100 stock index, suggesting divergent weakness for the crypto market. A 2% decline in the Bloomberg Galaxy Crypto Index (BGCI) in Q2 vs. the 15% gain in the Nasdaq 100 stock index demonstrates relative weakness in crypto,” he said in the tweet. .
Now Read: Here's Why This Analyst Says a $10 Billion Bitcoin Market Cap May Happen
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