How Bitcoin Could Strengthen From A 10% Correction In The Stock Market
20 January 2022 - 5:00AM
NEWSBTC
The party across global market might be coming to an end with
Bitcoin positioned to be one of the assets with the potential to
come on top. The shift in the U.S. Federal Reserve monetary policy
will ripple across the stock market as interest rates spike and
they reverse their asset purchase program. Related Reading | TA:
Bitcoin Reaches Key Juncture, Why Recovery Won’t Be Easy At least,
that’s how Mike McGlone, Senior Commodity Strategist for Bloomberg
Intelligence views it. In a recent interview with Scott Melker’s
“The Wolf Of All Streets” podcast, McGlone talked about Bitcoin as
a risk-on asset, inflation, and the potential correction that will
hit markets because of the change in FED policy. The expert
reminded investor of the old adagio “Don’t Fight the Fed” which in
the current macro-environment could translate to “don’t long risk
assets”. For Bitcoin, this shift could lead it to transform from a
risk on to a risk off asset. McGlone said the following on the
financial institution’s coming policies to decrease inflation,
sitting at its higher levels in 40 years, and what it could mean
for Bitcoin in the long run: (…) the lesson I learned about the
FED, what I think is happening in this case, is that will job on
until the market does their job for them or they have to keep
raising rates until markets go backwards, which mean the stock
market (…). I think the game is over (for stocks). They (the FED)
will be restraining until markets tell them to stop, but I think
Bitcoin will come up better off. In that sense, the expert
predicted a massive 10% to 20% correction in the stock market which
would result in a 1:1 correlation event with risk assets. This
event’s impact on BTC’s price could be short live, as it could for
Ethereum (ETH), but the altcoins sectors might be heavily hit with
some of the latest popular cryptocurrencies returning to their
previous lows. What Happened To The Bitcoin Bull-run? On the
alleged correlation between Bitcoin and the stock market, McGlone
claimed there is insufficient data to support this theory. The
benchmark crypto, the expert said, has only been part of the
mainstream for a few years. McGlone pointed out that Bitcoin (BTC)
is one of the few assets with strong fundamentals, which are only
getting stronger. The crypto asset’s supply is on a sustain
decline, with a rising demand, and a reduction in volatility,
“there is not too many asset that can say that”. Crypto dollars –
#Crypto assets exemplify global free-market capitalism, and a top
winner has been the dollar. Mainstays #Bitcoin, #Ethereum and
crypto dollars are poised to stay atop the ecosystem vs. about
16,000 rivals jockeying for speculative leadership
pic.twitter.com/rmqfs62ByA — Mike McGlone (@mikemcglone11) January
16, 2022 The first crypto by market cap has been stealing the shine
from traditional hard assets, such as gold, while it increases its
adoption levels, and it is included in some of the world’s largest
companies’ balance sheets. Despite these facts, the price of
Bitcoin seems to have made a full stop on its bullrun. However,
McGlone believes the follow trough will come with time. At the
moment, BTC adoption could be “burdensome” for large investors, but
the expert expects time to become a headwind for the
cryptocurrency. He added: I’m always skeptical of bull markets that
are so extremely bullish, like the stock market right now (…). Then
I look to this other asset (Bitcoin), it’s new, it’s just being
adopted, demand is going up, supply is going down, which one do I
want to be allocated to in the big picture? Related Reading |
Bitcoin Millionaires Are Flocking To This North American Tax Haven.
But What Do The Locals Think? As of press time, BTC’s price trades
at $42,010 with sideways movement in 24-hours.
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