Bitcoin

Bitcoin’s (<a href="https://finbold.com/cryptocurrency/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>) value experienced a significant surge in the last 24 hours following reports of Grayscale’s major <a href="https://www.reuters.com/business/finance/whats-stake-grayscales-spot-bitcoin-etf-case-against-sec-2023-08-29/" rel="noopener noreferrer nofollow">legal triumph</a> against the US Securities and Exchange Commission (<a href="https://finbold.com/topic/sec/" rel="noopener noreferrer nofollow">SEC</a>) regarding a spot <a href="https://finbold.com/guide/what-is-bitcoin-etf/" rel="noopener noreferrer nofollow">Bitcoin exchange-traded fund</a> (<a href="https://finbold.com/etfs/" rel="noopener noreferrer nofollow">ETF</a>). This victory injected renewed optimism into the <a href="https://finbold.com/category/cryptocurrency-news/" rel="noopener noreferrer nofollow">cryptocurrency market</a>.Nonetheless, caution remains imperative as underlying challenges persist, potentially curbing the sustained upward trajectory of BTC’s price amidst ongoing uncertainties in the crypto sphere and broader risk asset landscape.<a href="https://twitter.com/mikemcglone11/status/1696115105795084694?s&#61;20" rel="noopener noreferrer nofollow">Weighing in on these challenges</a> on August 28, commodity guru Mike McGlone said Bitcoin is currently lacking a top catalyst that historically provided it with “easy-money days” and outlined a potential “lose-lose” scenario for the maiden <a href="https://finbold.com/cryptocurrencies/" rel="noopener noreferrer nofollow">cryptocurrency</a>.<h2 id="header-0">Bitcoin’s surge threatened by low odds of rate cuts</h2>Notably, in his analysis, McGlone focused on Bitcoin’s performance against Nasdaq 100 – a benchmark <a href="https://finbold.com/category/stocks-news/" rel="noopener noreferrer nofollow">stock market</a> index tracking the consisting of the largest 100 non-financial equities listed on the namesake exchange.The expert highlighted that BTC first reached the current levels against the Nasdaq 100 in 2017; however, this time, the crypto asset is lacking a key catalyst to fuel its outperformance – the liquidity from the US Federal Reserve (Fed).<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/987a41bc63044dc082c13576a211aaef.png" />Bitcoin-to-Nasdaq ratio. Source: Mike McGloneWith one-year federal funds futures (FF13) sitting around 5%, there is “little chance the central bank will be cutting rates akin to the past easy-money days that Bitcoin grew up on,” McGlone explained.FF13 represents a one-year federal funds futures contract that analysts and investors use to speculate on future changes in the Fed’s target for the federal funds rate – the rate banks use for overnight lending.Notably, the FF13 contract predicts the rate’s level one year ahead, indicating market expectations for short-term interest rate shifts.<h2 id="header-1">The ‘lose-lose’ scenario</h2>Digging deeper into the analysis, the senior commodity strategist emphasized a potentially more pessimistic scenario for Bitcoin. This stems from the observation that the Federal Reserve is improbable to inject additional liquidity in the near future, given the presence of robust <a href="https://finbold.com/guide/high-inflation-impact-on-the-stock-market/" rel="noopener noreferrer nofollow">inflationary</a> pressures.<blockquote>– McGlone said.“Here’s a potential lose-lose. It’s unlikely the Fed will be adding liquidity any time soon due to sticky inflation metrics.”</blockquote>However, a major catalyst that could trigger a change is if “the resilient stock market,” – which has been helping keep interest rates elevated this year – starts trending downwards instead.If <a href="https://finbold.com/stocks/" rel="noopener noreferrer nofollow">stocks</a> decline, most risk assets, including Bitcoin, suffer, said McGlone. The Bitcoin-to-Nasdaq ratio is on a downward trajectory “for a good reason – the Fed,” he added.For now, there is little suggesting that something may change this path, the analyst concluded.Read more cryptocurrency news on <a href="https://finbold.com/category/cryptocurrency-news/?utm_source&#61;CMC&amp;utm_medium&#61;social&amp;utm_campaign&#61;CMC&amp;utm_content&#61;long" rel="noopener noreferrer nofollow">Finbold.com</a>.

Commodity expert outlines ‘lose-lose’ scenario for Bitcoin

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