As Bitcoin continues ranging between the $29K and $30K zone, the leading cryptocurrency’s inflection point is now pegged at $30,000, according to Mike McGlone, the senior commodity strategist at Bloomberg Intelligence.
McGlone pointed out:
“Inflection Points: Bitcoin at $30,000 vs. Nasdaq at 13,000 – An emboldened Federal Reserve (Fed) fighting inflation, despite an almost 30% drawdown in the Nasdaq 100 Stock Index, is a primary headwind for Bitcoin and the crypto market at the start of June.”
Source: Bloomberg Intelligence
Given that Bitcoin is sitting at an inflection point, McGlone believes that the Federal Reserve’s continued interest rate hike is the primary stumbling block to BTC’s price surge.
On May 4, the Fed increased the interest rate by 0.5%, the highest in twenty-two years, to tame soaring inflation. Therefore, this trend might continue until the 2% inflation rate target is achieved.
Since Bitcoin has been hovering around the $30,000 mark for a couple of months, it has emerged as a significant level.
Raj Chowdhury, the CEO of crypto trading platform PayBito, recently commented that BTC was steadily holding the $30K zone despite the stablecoin crash and crypto meltdown because of its unique decentralized proof-of-work (PoW) mechanism. He noted:
“Despite its apparent flaws, Bitcoin’s architecture makes it a modern-day marvel immune to global financial policies. The benefits far outweigh the cons, evident from its increasing acceptance across multiple nations and global organizations.”
Is Bitcoin staring at a reversal?
Since Bitcoin has been consolidating for some time, crypto analyst Rekt Capital believes the maiden cryptocurrency might be edging closer to a reversal based on the relative strength index (RSI).
The analyst explained:
“BTC RSI is now entering a period that has historically preceded outsized Returns. On Investment for long-term investors. Previous reversals from this area include January 2015, December 2018, and March 2020 All Bear Market bottoms.”
Source:TradingView/RektCapital
Therefore, time will tell how Bitcoin plays out in the short term.
Bitcoin and Ethereum have led the market in the recent downturns that have rocked the market. These two digital assets are no doubt market movers in their own right and as such, uptrends or downtrends begin with them. It has raised concern among investors who believe that the market is finally heading into a stretched-out bear market. However, not everyone believes this as some believe the current downtrend is only temporary.
Mike McGlone On Bitcoin And Ethereum
Mike McGlone is one of the leading Bloomberg analysts. Focused on the financial market, he authors a newsletter that shares his thoughts around various markets, including stocks and the crypto market. McGlone is currently one of the people with the most optimistic view of the market despite the various dips that have rocked the space. Most especially on the top digital assets in the crypto market.
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McGlone who was on The Wolf of all Streets podcast shared some interesting thoughts on the market, putting the analyst at an overall bullish position for bitcoin and ethereum.
BTC down to $38K | Source: BTCUSD on TradingView.com
The analysts point to the correlation with the stock market. This, he explains, is getting ready for a pullback and when this happens, bitcoin and by extension, ethereum, would benefit from this correction.
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“Here’s my prediction: the markets pull back,” said Mike McGlone. “We finally get a 10%, maybe 20%, correction in the stock market. All correlations are one, which is usually the way it works. Bitcoin comes out better off for it. Ethereum, potentially too.”
This pullback though is only reflected on the top two cryptos which McGlone expects to recover after this.
Other Cryptos May Not Fare Well
Talking about other cryptocurrencies, the analyst took a more bearish stance on them. The positivity displayed in the podcast towards top coins bitcoin and ethereum did not translate to the rest of the market which he does not expect to fare well despite the pullback.
McGlone especially focused on dog coins which were arguably the winners of 2021. The craze which saw various meme tokens with no utility whatsoever soar to billions of dollars in valuation was referred to as “stupid” by the Bloomberg analyst.
“The rest of the space, we do have to admit, the speculation you saw in the dog coins last year was indicative of this. It’s just stupid and we’re going to tell the story to our grandkids,” he said.
Even for a digital asset like Solana which had a largely successful year, McGlone did not seem excited about it. He lumped SOL in with the dog coins, which he said were the riskiest of assets. “The bottom line is they are the riskiest of assets,” said McGlone. “There’s massive speculation. I mean the dog coins and even in things like Solana,” he added.
Featured image from Bitcoin news, chart from TradingView.com
Bloomberg’s head commodity strategist says the crypto markets look poised for a bullish 2022, with Bitcoin and Ethereum set to lead the charge.
In the December edition of Bloomberg’s “Global Cryptocurrency Outlook,” Mike McGlone says that given crypto’s relative outperformance of other asset classes, many money managers may be forced to get involved.
“Past performance is no indicator of future results, but when a new asset class outperforms incumbents, naysayers have little choice but to join in. We see this process playing a primary role in 2022, as money managers may face greater risks if they continue to have no portfolio allocations to cryptos.”
McGlone says that BTC looks like it’s still on schedule to break the six-figure mark next year, partially on the back of rapid adoption from various economies and markets.
“Bitcoin appears to be on a trajectory for $100,000. We see it as more of a question of time, notably due to the economic basics of increasing demand vs. decreasing supply. There are ample examples of Bitcoin simply staying on course in 2022 of its process of adoption into the mainstream. U.S., Canadian and European exchange-traded funds and futures, migration into the 60/40 mix and legal-tender status in El Salvador point to a bull market in global adoption.”
The analyst says the digital asset markets are being driven by three main “stalwart” components, which are Bitcoin, Ethereum, and stablecoins, which he calls “crypto dollars.” According to McGlone, altcoins like Shiba Inu (SHIB) and Dogecoin (DOGE) show that the crypto markets are ripe for speculation, but that BTC, ETH, and USD-backed stablecoins will continue to maintain dominance.
In the long term, the commodity strategist says that Bitcoin could ultimately find a stable price somewhere in the neighborhood of 100x the price of an ounce of gold, which right now would be $178,300.
“A potential path for the Bitcoin price is to stabilize around 100x an ounce of gold and for volatility to resume its downward trajectory, if past patterns repeat.”
Source: Bloomberg
The full Bloomberg report can be read here.
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Ethereum’s native token Ether (ETH) could see yet another strong rebound in the sessions ahead as its price falls into a trading zone with a recent history of attracting buyers.
The rising trendline has been triggering ETH’s price rebounds since the beginning of October 2021 and comes as a part of a broader Ascending Channel range.
As a result, Ether’s path of least resistance has been to the upside despite pullbacks at the Channel’s upper trendline, with its quarter-to-date returns currently sitting at over 38%.
Most recently, the rising trendline was instrumental in limiting selloffs that followed the Ether price’s rally to a new record high above $4,870. That prompted analysts to expect another strong price rebound in the future, with a “swing long” setup posted by FOREXN1 on TradingView calling for a bull run to $5,000.
MacroCRG, a Twitter-based independent market analyst, said Ether “has to bounce” as it manages to hold the rising trendline as support following the latest price pullback.
Meanwhile, another analyst Pentoshi also anticipated a rebound but discussed the prospects of corrections below the rising trendline. Excerpts from his Nov. 12 tweet:
“I would love a 20-30% wipeout on alts. Usual bull run dip. Just bc I want it doesn’t mean it will happen. Greed to fear, please.”
Pentoshi’s downside target in the event of extended price correction was near $4,000, as shown in the chart below.
Ethereum’s ability to limit price corrections and — atop that — forming new highs appears to have more than just technical factors behind it.
Chris Weston, head of research at Pepperstone Financial Pty, cited fears of high inflation as the common denominator that has boosted demand for potential hedging assets across the crypto market, leading to Ether’s 500%-plus and Bitcoin’s 130%-plus price rallies in 2021.
To investors, “crypto is where the fast money is at,” Weston said in a note.
Additionally, last week, Mike McGlone, senior commodity strategist at Bloomberg Index, said he expects a $5,000 price for Ether, saying that investment “portfolios of some combination of gold and bonds appear increasingly naked without some Bitcoin and Ethereum joining the mix.”
Three #Crypto Musketeers Driving $3 Trillion Market Cap – Representing a better way to transact, a strengthening ecosystem and here-to-stay asset class, #cryptodollars are the most significant advancing part of the digital-money revolution and the third leg of the crypto stool. pic.twitter.com/qhEOXttPW8
— Mike McGlone (@mikemcglone11) November 9, 2021
The analyst cited declining supply as a major bullish backstop for Ether.
Namely, Ethereum’s software upgrade, dubbed “London Hard Fork,” in August implemented a code-change that started burning a portion of gas fees paid to miners via ETH, effectively reducing the supply.
Related: Ascending channel pattern and Ethereum options data back traders’ $5K ETH target
The upgrade has resulted in the removal of over 860,500 ETH tokens — now worth over $3.2 billion — since implementation, according to data provided by UltraSound.Money. At the current rate, the Ethereum network expects to burn 5.3 million ETH tokens every year versus 5.4 million issued.
Ethereum fee burn. Source: UltraSound.Money
McGlone noted that a declining supply rate would keep Ether on its bullish course against rising demand. Excerpts:
“Simply staying the course is the more likely outcome, as we see it. Ethereum has joined Bitcoin with a supply trajectory that is in decline by code. The first-born crypto is the store-of-value, and the No. 2 is the DeFi building block.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Bloomberg Intelligence Commodity Strategist Mike McGlone believes it is only a matter of time before the U.S. Securities and Exchange Commission (SEC) approves the country’s first Bitcoin exchange-traded fund (ETF).
In an interview with Stansberry Investor host Daniela Cambone on Sept. 21, McGlone asserted that Canada is extending a competitive lead over the United States after approving Bitcoin ETFs from 3iQ and Coinshares in April.
He emphasized that capital is flowing from the U.S. to Canada’s institutional crypto products, including from Cathie Wood’s Ark Invest. However, he believes that lawmakers in the United States will not want to miss out for much longer.
When asked about a timeframe on potential U.S. Bitcoin ETF approval, McGlone said it could happen “potentially by the end of October.” He maintained that it was likely to be a futures-backed product first, adding that it would open a “legitimization window for a massive amount of money inflow.”
McGlone also reiterated the latest report from Bloomberg Intelligence that stated Bitcoin prices hitting $100,000 was a possibility this year, and this would be driven by the approval of an ETF.
Crypto YouTuber Lark Davis shares McGlone’s price targets, observing that in previous bull markets in 2013 and 2017, the latter quarters saw huge price rallies.
#bitcoin still going to 100k this year, Q4 2013 and Q4 2017 both saw 300% + rallies.
What would make BTC do that again?
A BTC ETF getting approved in the USA.
— Lark Davis (@TheCryptoLark) September 22, 2021
Related:Canadian Bitcoin ETFs quickly hit $1.3B in AUM while US acceptance lags
The SEC is currently yet to approve a crypto ETF despite the number of applications it has received from prospective issuers continuing to mount.
Earlier this month, multinational financial services firm Fidelity Investments, lobbied the SEC to approve an ETP arguing that Bitcoin markets have already reached maturity under the regulator’s own standards.
The cryptocurrency industry woke up to bullish momentum, with the top assets printing impressive gains. Over the past 24 hours, the global crypto market cap has inched a 3.54% gain to top $2.35 trillion. Bitcoin (BTC) and Ethereum (ETH) arguably contributed the most gains to the combined market cap with over $973B and $462 billion, respectively.
Bitcoin Forms a Crucial Support at $51,500
After failing to breach the $51,000 price mark for more than a month, Bitcoin has received a steady upshoot in the past days as fueled by varying positive fundamentals. Forming new support at $51,500, the premier digital currency was trading at $51,756.52, atop a 3.26 % gain over the past 24 hours, according to CoinMarketCap.
Bitcoin’s growth looks promising in the short term. Many analysts, including Bloomberg Intelligence’s Mike McGlone, have pointed out that the path to the $100,000 price target has the least resistance compared to the growth from earlier in the year.
A look at the BTC/USD 4h chart on TradingView highlights similar sentiment with the bullish Short-Term Moving Average. There may be several retracements along the line in the coming days as the Relative Strength Index (RSI) shows BTC is in the overbought region.
El Salvador is on track to officially launch Bitcoin as its legal tender. The adoption of the cryptocurrency is a bullish one for Bitcoin in the journey towards mainstream adoption. This development is a watershed moment in the drive towards the previous ATH and into new price territories.
Ethereum Looking to Breach the $4,000 Benchmark
Ethereum has had a more bullish run compared to Bitcoin thus far this year, and after inching a 23.89% in the past month, the cryptocurrency is on track to breach the $4,000 price level, a feat it has not been able to surmount since it hit its all-time high of $4,362.35 back in May. At the current price of $3,961.30, Ethereum’s potential to breach through the major resistance at $4,000 is now higher.
The number of fundamentals inherent in the Ethereum blockchain, including its deflationary features ushered in by the London Hardfork Upgrade and the proposed Ethereum 2.0 switch, has further increased the network’s outlook. These and the increasing growth of DeFi and NFTs are billed to increase the utility of the Ether coin, which can positively influence future price growth.
What is protecting an investment portfolio from potential stock market volatility? As per Bloomberg Intelligence’s Mike McGlone, a merged exposure of Bitcoin (BTC), gold, and government bonds.
The senior commodity strategist, who sees BTC heading to $100,000, pitted derivatives in a new report representing the three safe-haven assets against the performance of the S&P 500 index, finding that the trio has been outperforming the benchmark Wall Street index at least since the start of 2020.
Bitcoin-Gold-Bonds performance against the S&P 500 index. Source: Bloomberg Intelligence
The Bitcoin-Gold-Bonds index took data from the Grayscale Bitcoin Trust (GBTC), SPDR Gold Shares (GLD) and iShares 20+ T- Bond ETF (TLT). The three funds enable investors to gain exposure in the market without requiring to hold/own the physical asset.
Bitcoin more profitable than gold and bonds
McGlone noted that Bitcoin did some heavy lifting in making investors’ risk-off strategy successful, adding that their portfolios “appear increasingly naked” without the flagship cryptocurrency even if they remain exposed to gold and bonds.
The statement took cues from the performance of Bitcoin, gold, and the 10-year US Treasury yield against the prospect of rising quantitative easing and debt-to-GDP levels. Since March 2020, Bitcoin has risen almost 1,190%, which comes to be extensively better than spot gold’s 25.93% spike.
Meanwhile, the U.S. 10-year bond yield has jumped from its record low of 0.33% to 1.326% in the same period.
However, despite a healthy spike, the returns on the benchmark government bond have come to be lower than the core U.S. inflation of 5.4%, suggesting that investors who hold bonds as safety against risky equities are making an inflation-adjusted loss.
US consumer price inflation rose to 5.4% in July. Source: Forex Live
As a result, lower yields have created avenues for corporates to borrow at meager rates for expansion, thus giving equities a boost. Additionally, investors in the secondary markets have started moving their capital into non-yielding assets like Bitcoin and gold, anticipating higher payouts.
Yield rebound ahead?
Former bond investor Bill Gross, who built Pimco into a $2 trillion asset management firm, noted that bond yields have “nowhere to go but up.”
The retired fund manager said that the 10-year U.S. Treasury note yields would rise to 2% over the next 12 months. Therefore, bond prices will fall due to their inverse correlation with yields, resulting in a loss of about 3% for investors who bought debts all across 2020 and 2021.
Federal Reserve purchased 60% of net US government debt issuance over the past year with its $120 billion a month asset purchase program to boost the US economy. However, in August, the U.S. central bank announced that it would slow down its bond-buying by the end of this year, given the prospects of its 2% inflation rate target and economic growth.
“How willing, therefore, will private markets be to absorb this future 60 per cent in mid-2022 and beyond,” questioned Gross, adding that the US bond market would turn into an “investment garbage.”
“Intermediate to long-term bond funds are in that trash receptacle for sure.”
Rising rates could threaten to draw capital out of overvalued U.S. stocks. At the same time, as a risk-off trade, funds could also start flowing into the Bitcoin market. Julian Emanuel, the chief equity and derivatives strategist at brokerage firm BTIG, shed light on the same in his interview with CNBC in February. Excerpts:
“This is the environment where that catch-up trade is going to show its ability […] You’re coming from such a low absolute level of rates that higher rates actually is likely to be supportive for alternatives like Bitcoin.”
Related: 3 reasons why a Bitcoin ETF approval will be a game changer for BTC price
To McGlone, the capital inflow into Bitcoin and the rest of the cryptocurrency market, including Ethereum, would be about finding the next-best investment opportunity. He said that digital assets may represent the “higher-beta potential,” adding:
“We see Ethereum on course toward $5,000 and $100,000 for Bitcoin.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Despite Bitcoin (BTC) slipping back below $50,000, more and more investors are likely to move their capital into Bitcoin and gold markets in the second half of 2021 (H2), asserted to Mike McGlone on Aug. 23, the senior commodity strategist at Bloomberg Intelligence.
The financial analyst cited the consistently lower yields offered by the 30-year US Treasury note behind his upside analogy. He noted that if its rate of return persists below 2%, it could enhance the price discovery stage for Bitcoin while posing a competitive advantage for traditional safe-haven assets like gold.
#Bitcoin, #Gold & Long #Bonds: Three Amigos for 2H Appreciation? The U.S. Treasury 30-year yield sustaining below 2% has bullish implications for gold and Bitcoin. Unlike the stock market, the old analog store-of-value and new digital version share substantial corrections.. pic.twitter.com/UYanE4sPSb
— Mike McGlone (@mikemcglone11) August 23, 2021
“Unlike the stock market, the old analog store-of-value and new digital version share substantial corrections,” McGlone added, referring to the little reversion in the S&P 500 index in the first half of 2021 (H1) that increases its potential to correct lower in the H2.
In turn, it arranges new capital for other markets with extreme upside potential, such as Bitcoin.
Bitcoin, gold, and US bonds index versus S&P 500 total return index. Source: Bloomberg Intelligence
“The S&P 500 up or down 10% in 2H offers a simple binomial model,” wrote the Bloomberg analyst in a research note in July.
“If up, it would be about 3x the annual norm since 1928 and buoy the Bloomberg Galaxy Crypto Index above the 1H gain of about 80%. If down, bond yields would likely follow and Bitcoin may be a primary beneficiary.”
Bitcoin to reach new record high
The Federal Reserve’s unprecedented interference in the bond market after the March 2020’s market crash drove rates down. Institutional investors that ideally look for 5% annual yields from the bond market to curb inflationary pressures now grappled with short-term bonds, some of them offering yields below zero.
Meanwhile, yields on the longer-dated Treasury also fell to record lows. That forced investors to look for alternatives in the riskiest parts of the financial markets—higher-returning, non-debt investments like Bitcoin.
“It was the breach of [the 2%] threshold in 2020 that preceded the risk-off swoon and laid the foundation for Bitcoin’s move toward new highs this year,” the Bloomberg research noted.
30-year US Treasury yield versus Bitcoin price. Source: TradingView.com
Tapering and Jackson Hole
McGlone’s statements on bonds and Bitcoin correlation come as Jerome Powell, the chairman of Federal Reserve, prepares to deliver a speech at the Jackson Hole summit this week, typically one of the most influential economic events.
The Fed’s efforts to reduce its $120 billion per month bond-buying policy expects to be a dominant theme during the (virtual) Jackson Hole meeting. Investors will watch Powell’s words for any clues on how and when the U.S. central bank would begin its tapering program.
In their July 27-28 meeting, Fed officials agreed to start unwinding their bond-buying policy over a sanguine outlook for economic growth and the jobs market.
Nonetheless, the 30-year Treasury yield remained lower after the news, with reports surfacing that investors were still expecting economic downturns owing to the spread of the Covid-19 Delta variant.
“Many clients have not particularly understood how rates markets have moved, and that has brought in a degree of caution you wouldn’t normally see,” Guneet Dhingra, head of US interest rate strategy at Morgan Stanley, told the Financial Times.
Related: Bitcoin bullish cross on weekly chart paints $225K BTC price target if history repeats
After the Fed outlook on Aug. 18, Bitcoin price rose by more than 14% to reach their three-month high of $50,784.
The BTC/USD exchange rate slipped below $50,000 on Monday on profit-taking sentiment. At its lowest, the pair’s bid was $49,369.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Bloomberg Intelligence’s Senior Commodity Strategist, Mike McGlone, has weighed in on the debate about the possibility of Ethereum (ETH) flippening Bitcoin (BTC) as the world’s largest cryptocurrency.
His point was drawn on the major achievements attained in the Ethereum blockchain thus far this year and the upcoming chain merger.
According to McGlone, if Bitcoin were to catch up with Ethereum’s achievements this year, its price target will tend toward $100,000.
“Ethereum in 2021 Is Bitcoin Guidance for $100,000: Flippening? If #Bitcoin were to catch up to #Ethereum’s performance this year, the No. 1 crypto’s price would approach $100,000. Though we see Bitcoin on that path, there appears little can stop the process of Ethereum flippening,” he said via his official Twitter account.
Ethereum is an open-source blockchain network through which decentralised applications and smart contracts are built. The broad adoption of the blockchain for the development of various protocols has largely caused congestion on the network, stirring several inherent problems, including high network fees.
To solve these challenges, the developers behind the protocol have had to introduce several changes dubbed Ethereum Improvement Protocols (EIPs). The latest has the number 1559, or the “London Hardfork”. This particular upgrade went live last week, and it introduced a fee structure that will help curtail high fluctuations. The EIP 1559 upgrade also introduced the element of deflation into the Ether coins in circulation, with a total of about 21,065 tokens burnt thus far.
The broad improvement in the protocols lends credence to a boosted utility for the blockchain and the Ether coin. All these are bound to promote the continued embrace of the blockchain, both by users and retail and institutional investors. Bitcoin is not known to implement these improvements. The ultimate migration from the current Proof-of-Work network by Ethereum to a Proof-of-Stake network (Ethereum 2.0) will finally usher in a scalable and superior network that can adequately support the network’s growth.
It is a long journey. However, with increasing utility, McGlone and a number of pro-altcoin investors believe this flippening is achievable.
