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Bloomberg analyst Mike McGlone has labeled Bitcoin (Bitcoin) ‘ripe’ ‘wildcards’ that outperform when traditional strains finally bottom out.
In a Sept. 7 post on Linkedin and Twitter, McGlone said that the tightening of the United States (US) Federal Reserve is likely to set the direction of the stock market, while Bitcoin could buck the trend. Explaining that it remains a “wildcard”, it states:
Bitcoin is a wild card ripe to outperform when equities hit bottom, but like gold and bonds it is transitioning.
Commodity strategists shared Sept. 7 details reportnoted that Bitcoin is poised to bounce back strongly from the bear market despite strong headwinds for riskier assets:
Usually it is only a matter of time before the Feds money gauge flips towards a cut, and when that happens, Bitcoin is poised to become a major beneficiary.
The report points out that while Bitcoin will follow a similar trend to government bonds and gold, Ethereum (ETH) may have a high correlation with equities.
The Fed’s tightening of quantitative tightening came amid several major rate hikes throughout 2022. Up 75 basis points on July 27.
5 Chart Macros: Oil, Commodities, Stocks, Bonds, Bitcoin – #crude oil A persistent bear market has resumed and may be refueling the T-Bond bull market. # Federal Reserve More tightening as global GDP turns negative could drive transformation #stock It goes down with bad news and goes up with good news. pic.twitter.com/KZEWsZyI8h
Mike McGlone (@mikemcglone11) September 7, 2022
According to Bloomberg, it’s unclear exactly when the Fed’s quantitative tightening will end, but some economists predict it will begin “sometime in 2023.” paper Published in August.
Quantitative tightening is a contractile monetary policy tool used by central banks to reduce the level of money supply and liquidity in an economy, allowing less spending across markets such as equities.
Related: Bitcoin likely to transition to risk-off asset in 2H 2022, according to Bloomberg analysts
But despite Bloomberg’s bullish view, other experts believe Bitcoin and the stock market are actually more correlated than they used to be.
Cointelegraph contributor Michael van de Poppe recently said, The S&P 500 Index and BTC were nearing 100%, Many IMF economists 10x increase in correlation Between the crypto and stock markets in several regions of the world.
