The Resemblance Between Bitcoin’s Chart and the 1930 Stock Market
The senior commodity strategist at Bloomberg, Mike McGlone, believes that Bitcoin could be in trouble as its price chart resembles the 1930s stock market’s chart following the major crisis in 1929. McGlone compares Bitcoin’s chart from 2012 to 2023 with the stock market’s chart from 1920 to 1931. He blames the US Federal Reserve for shaping his bias towards a stance similar to Roger Babson’s, who warned about elevated equity prices before the crash in 1929.
Key Points:
- Bitcoin’s price chart resembles the stock market’s chart from the 1930s.
- Statistician Roger Babson warned about elevated equity prices before the crash in 1929.
- McGlone compares himself with Babson and blames the US Federal Reserve for his bias.
- Bitcoin has lost 62% of its value since its all-time high in 2021.
- Bitcoin’s ability to meet analysts’ expectations depends on further developments.
If McGlone’s analysis is accurate, Bitcoin could be heading towards a major drop that would surprise investors, similar to what happened in 1930. However, most Bitcoin analysts expect the price to start increasing soon, ahead of the block subsidy halving in April 2024. The current challenges for Bitcoin include miners running their businesses at a loss and the uncertain state of the crypto market and macroeconomy.
Hot Take: While there are similarities between Bitcoin’s chart and the 1930 stock market, it is important to consider other factors that could impact Bitcoin’s future. The cryptocurrency market is volatile, and its success depends on various developments and sentiments. Investors should approach Bitcoin with caution and recognize the speculative nature of investing.
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