Bitcoin

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 Cryptocurrencies, known for their volatility, pose the greatest risk in the event of a recession, warns Mike McGlone, Bloomberg Intelligence's Senior Commodity Strategist, in a recent <a href="https://twitter.com/mikemcglone11/status/1678842710776487937" rel="noopener noreferrer nofollow">tweet</a>.&nbsp; 
 Despite Bitcoin being the least of concerns among cryptocurrencies, McGlone predicts that the U.S. is unlikely to dodge an economic downturn by year-end. 
 As a consequence of an imminent recession, central banks may resort to injecting more liquidity into the system, a practice that usually results in struggling risk assets and lower interest rates. The strategist also anticipates a negative impact on stocks that have bounced back. 
 McGlone bases his prediction on the historical relationship between liquidity and risk assets, noting significant negative liquidity at the end of the first half of 2023. 
 He suggests that this could signal the arrival of a long-anticipated recession, which would add headwinds for both cryptocurrencies and bounced-back stocks. The prediction comes in the face of an unfriendly Federal Reserve, which, according to Bloomberg Economics, seems more inclined to continue hiking interest rates. 
 <a href="https://u.today/fidelitys-timmer-shares-bearish-warning-about-bitcoin" rel="noopener noreferrer nofollow">card</a>Interestingly, the strategist also draws a parallel between the performance of Bitcoin, the so-called "digital gold," and that of physical gold during the 2008 financial crisis. 
 He notes that gold saw a drop of approximately 30% from its peak before rallying. The implication here being that <a href="https://u.today/bitcoins-btc-run-to-30000-is-not-what-you-think-at-all" rel="noopener noreferrer nofollow">Bitcoin</a> could potentially follow a similar trajectory in the second half of 2023. At the time of his tweets, Bitcoin was on an upward trajectory, despite the New York Federal Reserve's probability of recession from the yield curve being at its highest since 1982. 
 However, the impact of these economic indicators on Bitcoin's price remains uncertain. As the world's premier cryptocurrency, Bitcoin has traditionally shown resilience in times of economic distress. This was particularly evident during the COVID-19 pandemic, where Bitcoin not only bounced back but also reached unprecedented highs. Despite the warnings of potential risks, investors, particularly those with a high-risk tolerance, may still view any dips as potential buying opportunities.
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Cryptos Are Tops in Risk in Case of Recession, Bloomberg's McGlone Warns

U_Today

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