Bloomberg Analyst Issues Bitcoin and Ethereum Warning, Says Potential Deflation and Recession Could Crush Risk Assets
Bloomberg Intelligence senior macro strategist Mike McGlone is warning Bitcoin (BTC) and Ethereum (ETH) bulls that crypto and risk assets could be correcting.
McGlone shares a graphic on his Twitter after comparing ETH/BTC, NASDAQ and the Federal Reserve’s money supply.
According to the analyst, the ETH/BTC pair can act as a leading indicator of risk assets, suggesting an incoming correction in the stock market and perhaps crypto as well.
McGlone says markets may adjust to a developing period of disinflation brought on by the sharp reversal in monetary policy by the Federal Reserve.
“Don’t blame $2,000 Ethereum, $30,000 Bitcoin. If risk assets peak, markets may be in the early days of adjusting to disinflation, which is normal in recessions, but the Federal Reserve may never unwind with the ease it has in the past. Enduring Deflation can be mutual”
In a recent interview with Yahoo Finance, the Bloomberg analyst says gold is likely to be one of the best-performing assets in the deflationary recession he predicts.
“I think it’s pulling back a little bit today, but I think it’s inevitable that gold will get above this level of $2,000 an ounce and never look back. And the key catalyst is the stock market potentially rolling over…
So I see this as just the catalyst for gold to take off. It’s one of the few commodities I’m very positive on because everything is starting to tilt downwards towards deflationary trends.”
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Featured image: Shutterstock/Liu zishan
