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

News Feed - 2023-02-09 09:02:46

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


Bloomberg Intelligence’s senior commodity strategist Mike McGlone has warned that “cryptos may be facing their first real recession.” The Federal Reserve tightening despite the risk of a recession “could be a primary headwind for most risk assets, notably cryptos,” he added. ‘Cryptos May Be Facing Their First Real Recession’


Bloomberg Intelligence (BI), the research arm of Bloomberg, published its February 2023 crypto outlook last week. BI’s senior commodity strategist Mike McGlone tweeted Sunday: Cryptos may be facing their first real recession, which typically means lower asset prices and higher volatility.


“The last significant U.S. economic contraction, the financial crisis, led to the birth of bitcoin, and the possible coming economic reset may mark similar milestones,” he added.


Regarding “how much price pain will be before longer-term gains resume,” the report details, “Our graphic shows the Nasdaq 100 at parity with [bitcoin’s] 200-week moving average, relatively lofty based on the history of U.S. recessions,” elaborating: We don’t expect the crypto market to be spared if the risk asset tide continues to recede. Fed Tightening ‘Could Be a Primary Headwind’ for Cryptocurrencies


“Central bank actions have delayed impacts, and most risk assets fall in recessions. That could spell trouble for cryptos, which are among the riskiest,” Bloomberg Intelligence noted. “The crypto low may have come with FTX’s demise, but a scenario more akin to the collapse of Lehman Brothers is also possible, where the trough came much lower about 6 months later.”


The report continues: Fed tightening despite the risk of recession could be a primary headwind for most risk assets, notably cryptos. Buy-and-hold strategies may benefit at the expense of the more speculative and leveraged, subject to rising volatility typical in bear markets.


“The pandemic was a major disruption that may shape markets for years. It sparked the greatest fiscal and monetary pump in history, and that’s still in the process of dumping,” the report adds. “Typically, risk assets bottom well after the Fed first eases, which remains quite distant at the start of February.” Tags in this story crypto recession, Fed tightening, Fed tightening crypto, Federal Reserve, Recession, recession cryptocurrency, recession risk recession crypto


Do you agree with Mike McGlone and Bloomberg Intelligence? Let us know in the comments section below. Kevin Helms


A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Shark Tank Star Kevin O"Leary Says Most Crypto Tokens Are Worthless — "They"ll Eventually Just Go to Zero" MARKETS AND PRICES | 6 hours ago Investment Manager Predicts Gold Could Hit $3,000 This Year MARKETS AND PRICES | 1 day ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleCryptocurrency Exchanges Offer Assistance to Earthquake-Hit Turkey Next articleShark Tank Star Kevin O’Leary Says Most Crypto Tokens Are Worthless — ‘They’ll Eventually Just Go to Zero’ Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFollowing a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days


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