Recently, Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence (Bloomberg’s research arm on the Bloomberg Terminal”), shared his thoughts on Bitcoin.
On 19 October 2022, McGlone said:
“It’s little surprise that a relatively new asset that had skyrocketed has declined due to the rapid pace of Federal Reserve tightening in 2022, but Bitcoin is showing signs of bottoming and divergent strength in 4Q. The lowest-ever crypto volatility vs. the Bloomberg Commodity Index may portend better performance for Bitcoin…
“Bitcoin’s ascending leading-indicator status and potential transition toward a risk-off asset like gold and US Treasury long bonds may be playing out in 2H [second half of the year]. Our graphic shows the primary headwind for most risk assets in 2022: aggressive Fed tightening to squash inflation. An indication of divergent strength for the crypto may be that its price of around $19,500 on Oct. 18, with the one-year federal funds future (FF13) signaling rates close to 4.75%, was about the same as it was in June, when FF13 was near 3.5%...
“The fact that the benchmark crypto hasn’t dropped along with the latest round of rate-hike expectations may also signal a Fed end game on the horizon. A top potential catalyst for central banks to curtail tightening is for markets, notably stocks and commodities, to do it for them, which may favor Bitcoin.“
He went on to add:
“Bitcoin’s definable diminishing supply is unprecedented on a global scale, and so prices should continue to rise over time unless something unlikely reverses demand and adoption trends, given the laws of supply and demand.“
He also said:
“Bitcoin may be entering an inexorable phase of its migration into the mainstream, and at a relatively discounted price.“
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