​Bloomberg analyst allows the possibility of the bitcoin rate to fall to $7000

The material is not an investment recommendation and is published for information purposes only.

What’s new? Bloomberg’s senior commodity strategist Mike McGlone warned that the bitcoin rate could fall to 2020 levels. He noted that the asset is still worth nearly four times what it was when the US Federal Reserve System (Fed) began rapidly increasing the money supply during the market crash amid the COVID-19 pandemic. With liquidity drying up and interest rates rising, the analyst said, it is possible that the average value of the first cryptocurrency will return to the level where the rally began, around $7000.

That the #FederalReserve has kept hiking rates in 1H despite a bank run, plunging commodities and producer prices may portend deflation potential for risk assets. Peaking #Bitcoin and #copper vs. rallying #equitymarkets appears as an unsustainable trajectory. pic.twitter.com/deEhESQ62u

— Mike McGlone (@mikemcglone11) May 22, 2023

What else did the analyst report? In an interview with crypto trader Scott Melker, McGlone criticized the idea that bitcoin could become a risk-off asset like gold in the current financial environment. Only after BTC demonstrates a greater divergence from equities does the expert will believe that the asset is risk-off.

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McGlone said he was bullish on gold, adding that at one point he was the same way about bitcoin. “The problem I have is all risk assets went down last year and all risk assets went up this year,” the expert noted. According to him, only slight hints could be seen that bitcoin is showing divergence strength, but it would need the S&P 500 stock market index to fall 20%, to 3000 points, and bitcoin to not hit a new low to amplify it.

The S&P 500 stock index includes a basket of shares of the 500 largest-capitalized public companies traded on the US stock exchanges. The index is compiled by analytics firm, Standard & Poor’s. As of May 23, it is at the level of 4182,57, having decreased by 0,24% per day.

Bitcoin is trading at $27 324 on Binance, having gained 1,69% in 24 hours. Weekly growth, according to aggregator CoinGecko, amounts to 1,3%.

Earlier, McGlone allowed a further decline in the bitcoin rate due to interest rate hikes in the United States, undertaken to reduce inflation.