Bloomberg Analyst Warns of Downside Risk for Bitcoin
Bloomberg Intelligence’s senior macro strategist, Mike McGlone, has issued a warning about the value of Bitcoin. In an interview, McGlone explains that Bitcoin is now facing a monetary policy environment of rising interest rates after flourishing in an era of historically low-interest rates.
According to McGlone, the price of Bitcoin is currently in the process of reverting. He highlights the Federal Reserve’s tightening as a significant factor in this reversion. When interest rates are high, risk assets like Bitcoin tend to decrease in value as investors find safer assets with better returns.
McGlone suggests that Bitcoin could drop by over 5% from its current level, potentially triggering a flight from other risk assets. He believes that the excessive price increase in Bitcoin will eventually lead to it trading more like gold and treasury bonds.
Bitcoin Price Forecast
At the time of writing, Bitcoin is trading at $26,778.
Hot Take: Is Bitcoin’s Downside Risk Real?
Bloomberg analyst Mike McGlone warns that Bitcoin may face downside risk due to rising interest rates. With the Federal Reserve tightening its monetary policy, risk assets like Bitcoin become less attractive compared to safer investments. This could cause a drop in Bitcoin’s price by over 5% and trigger a flight from other risk assets. However, some analysts argue that Bitcoin’s unique qualities and growing adoption make it resilient to traditional market factors. Only time will tell if Bitcoin will continue its upward trajectory or experience a significant correction.
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