The worst is not over for Bitcoin and risk assets - BI's Mike McGlone

- As the U.S. economy heads towards a recession, the first major recession since the launch of Bitcoin in 2009, Bloomberg Intelligence senior macro strategist Mike McGlone is warning cryptocurrency investors that the worst is yet to come, and it would be wise to limit exposure to risk assets as volatility is likely to surge.

“The don't-fight-the Fed mantra remains a strong headwind for Bitcoin and crypto prices,” McGlone said. “The cat-and-mouse game between the rallying stock market and watchful central banks could be an obstacle for risk assets.” When it comes to how Bitcoin will fare in a U.S. recession as compared to gold, McGlone said that “The high probability of a US recession and tendency for gold to shine in such conditions may favor the metal in 2H vs. Bitcoin, with its nascent risk-asset status.”

“Bitcoin's high of about $30,000 in 2023 vs. the 100-week mean around $33,000 may show the pre-eminent, 24/7, globally traded risk indicator feeling gravity from the comfort zone around $7,000 before the unprecedented 2020-21 liquidity boost,” he said. “That the widely expected US recession has not yet started may pressure risk assets accordingly.

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