Mike McGlone, Bloomberg Intelligence’s senior macro strategist, has just issued an alert to investors, warning that Bitcoin’s (BTC) latest correction could be a clue to what’s to come.
McGlone tells According to his 60,000 followers on the social media platform X, the rise of crypto in a time of zero interest rates could spell trouble for the emerging industry as loose monetary policy will soon reverse.
According to McGlone, despite the newfound potential for future exchange-traded funds (ETFs), Bitcoin’s price decline may indicate that a liquidity crisis is on its way.
“ZIRP (zero interest rate policy) in reverse – cryptos in the middle and Bitcoin tipping downwards. Cryptos have come of age during an unprecedented period of zero interest rates [are] quickly reverse, with consequences for prices.
Down about 15% in the third quarter to Sept. 6, despite US spot ETFs moving closer to approval and a booming stock market, Bitcoin has something to tell us. The crypto traded 24/7 could be a leading indicator of a serious economic reset worthy of the extraordinary pump – and then dump – of liquidity.”
Last month, a judge ruled that the U.S. Securities and Exchange Commission (SEC) must reconsider its stance on approving crypto firm Grayscale’s application to create a BTC ETF in order to remain consistent.
McGlone’s data includes Bitcoin’s valuation from $1 to an all-time high of $69,000 amid a period of low interest rates, and so it may “make sense” that the top crypto assets by market would rise in price in times of rising interest rates. return.
“It may make sense that a revolutionary digital asset/currency that came of age during an unprecedented period of zero and negative interest rates will reverse some of it when interest rates rise…Bitcoin’s relative weakness may be following the path of least resistance, thanks to rapidly rising interest rates. prices.
Federal funds futures were trading around 5.45% in November, compared to an average of 0.6% between 2011 and 2021, as Bitcoin rose in value from $1 to its peak of around $69,000.”
Bitcoin is trading at $26,226 at the time of writing, up 1.9% in the last 24 hours.
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