Cryptocurrency

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 <p class="paragraph">Mike McGlone, Commodity Strategist at Bloomberg, highlighted on X (formerly Twitter) on October 2, 2023, the concerning trend in the cryptocurrency market despite Bitcoin&nbsp;(BTC) rising above $28,000 on Monday.&nbsp;</p> 
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 <p class="paragraph">McGlone noted that cryptocurrencies are currently grappling with the specter of a <a rel="noopener noreferrer nofollow" title="recession" href="https://thebittimes.com/tag/recession.html">recession</a>, and the third quarter’s weakness in the crypto space could either be a transient recovery blip or a more ominous sign of an impending <a rel="noopener noreferrer nofollow" title="recession" href="https://thebittimes.com/tag/recession.html">recession</a>. The prevailing sentiment, as indicated by the analyst, leans towards the latter possibility.</p> 
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  <p class="paragraph">“Crypto weakness in 3Q may be a recovery blip or a <a rel="noopener noreferrer nofollow" title="recession" href="https://thebittimes.com/tag/recession.html">recession</a> leaning. Our bias is the latter, as almost all risk assets gained in 2023 and rolled over into the quarter.”</p> 
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  <img decoding="async" loading="lazy" width="700" height="514" src="https://cdn.thebittimes.com/images/2023/10/02/3fd36490f74cd9175d798618eea8bca5.webp" alt class="wp-image-130869" srcset="https://cdn.thebittimes.com/images/2023/10/02/3fd36490f74cd9175d798618eea8bca5.webp 700w, https://cdn.thebittimes.com/images/2023/10/02/3fd36490f74cd9175d798618eea8bca5.webp 300w" sizes="(max-width: 700px) 100vw, 700px"> 
  <figcaption class="wp-element-caption"> <em>Cryptos face a potential recession. Source: Bloomberg Intelligence</em> 
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 <p class="paragraph">The rationale behind this perspective is rooted in the performance of various risk assets throughout 2023, which exhibited gains but subsequently experienced a downturn in the current quarter.</p> 
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 <p class="paragraph">Despite <a rel="noopener noreferrer nofollow" title="signals" href="https://thebittimes.com/tag/signals.html">signals</a> of economic contraction in the US and Europe, coupled with a property crisis in China with deflationary implications, most central banks persist in their tightening&nbsp;measures. This backdrop sets the stage for a nuanced <a rel="noopener noreferrer nofollow" title="Category Analysis" href="https://thebittimes.com/analysis.html">Analysis</a> of the crypto market.</p> 
 <h2 class="wp-block-heading" id="h-parallels-between-1987-and-2008-peak-oil-prices">Parallels between 1987 and 2008 peak oil prices</h2> 
 <p class="paragraph">The Bloomberg Galaxy Crypto Index (BGCI) is observed to have underperformed relative to expectations. The analyst suggests that this may signify a fundamental shift for an asset class that had become accustomed to thriving in a zero-interest-rate environment.&nbsp;</p> 
 <p class="paragraph">Drawing historical parallels, the strategist points to instances such as the spike in US Treasury yields preceding the 1987 crash and the peak in crude oil prices in July 2008.</p> 
 <p class="paragraph">The narrative further explores the correlation between Bitcoin’s downturns and Federal Reserve policy pivots. This observation suggests that Bitcoin’s movements could serve as a leading indicator, providing insights into potential shifts in broader market liquidity.&nbsp;</p> 
 <p class="paragraph">McGlone emphasizes the inevitability of time playing a crucial role, drawing a parallel to the cautious perspective held on crypto ETFs when the BGCI was launched in 2018.</p> 
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  <p class="paragraph">“Bitcoin swoons have preceded Federal Reserve pivots, which may underscore the crypto’s leading indicator attributes and what might be needed to revive liquidity.”</p> 
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 <p class="paragraph">In summary, the market <a rel="noopener noreferrer nofollow" title="Category Analysis" href="https://thebittimes.com/analysis.html">Analysis</a> underscores the vulnerability of the crypto market to broader economic trends, signaling a cautious outlook with the potential for a protracted <a rel="noopener noreferrer nofollow" title="recession" href="https://thebittimes.com/tag/recession.html">recession</a>ary phase.</p> 
 <p class="paragraph"><strong><em>Disclaimer</em></strong><em>: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.</em></p> 
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/crypto-recession-alert-mike-mcglone-signals-troubles-ahead-tbt64817.html">https://thebittimes.com/crypto-recession-alert-mike-mcglone-signals-troubles-ahead-tbt64817.html</a></p>

Crypto recession alert: Mike McGlone signals troubles ahead

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