Bitcoin (BTC), the largest cryptocurrency by market capitalization in the last decade, is still in a transitional phase. Bloomberg Senior Commodity Strategist Mike McGlone, known for his positive views on Bitcoin, explained his views after BTC’s consecutive price losses. Here are the details.
Cryptocurrency market responds to macroeconomic outlook
Bloomberg Senior Commodity Strategist Mike McGlone said in an interview about the leading cryptocurrency Bitcoin:
This process is painful as crypto investors can confirm, but it can take BTC to new heights. In the last 6 months, the Bitcoin price has slumped from its all-time high of $69,000 to the current level of $30,000. As we have reported as
Kriptokoin.com, in the short term, the difficulty for investors has become more apparent as Bitcoin has been losing price for 9 consecutive weeks. McGlone believes that cryptocurrency and other risky assets are responding to the current macroeconomic outlook. The cryptocurrency market has experienced some of the best performances in the global markets. Rally in the emerging asset class often corresponds to 4-year cycles with parabolic bull runs followed by multi-year bear markets. Many in the industry believe that cryptocurrencies have entered a bear market or crypto winter.
Institutional demand could rise as Bitcoin rises towards $100,000
The losses were compounded by two factors: the initiation of economic tightening measures by the US Federal Reserve and the collapse of the Terra ecosystem. In this sense, McGlone argued that since Bitcoin and other cryptocurrencies have recorded the biggest gains, they must now face the biggest losses. When an asset is trending in one direction and then returns to an “average” price or bottom, this process is called “Average Reversal”. The Senior Commodity Strategist said it was “difficult” to calculate an exact bottom price. Bitcoin is moving along with the Nasdaq 100 and both reached their 100-week moving averages recently when the price of BTC dropped to $30,000.
McGlone believes that trends are resulting in more losses but Bitcoin needs to “stand out”. This potential rally will be driven by “institutional offerings” as BTC continues to be adopted by institutions around the world, and due to the “inelastic supply” of the cryptocurrency. Despite its recent growth, McGlone claims that a small percentage of investment firms include BTC as part of their portfolios. That may change in the coming years as Bitcoin becomes a “global collateral” and begins a fresh rise towards $100,000 by 2024.
Gold may lose its market share to Bitcoin
Continuing to explain his views on BTC’s future price outlook and potential bottom, McGlone added:
30 thousand dollars worth of Bitcoin I think it’s a very good support pivot. Basically, it needs equity to push it down. But what I felt and totally expected is that BTC will go as low as $20,000 and then it will bounce back to $100,000 in the next two years.
The current bearish trend could be a good thing for some of the strongest projects in the crypto industry. This will help remove speculative assets and ensure that these projects have a solid foundation. These projects may continue to take market shares from traditional markets. As the expert said, the crypto market was only 0.5 percent of the market cap for global stocks. Now it’s around 1%. In the coming years, as the economy becomes deflationary and stocks trend down, McGlone believes Bitcoin and gold will be two of the best assets to hold. However, the precious metal could lose market share to the leading cryptocurrency.
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