Bloomberg Intelligence analyst Mike McGlone says that the blue-chip crypto assets are set to outperform other commodities by the end of the year.
In a new interview on the Scott Melker podcast, McGlone says that leading digital assets Bitcoin (BTC), top smart contract platform Ethereum (ETH), and ETH competitor Solana (SOL) will resume their uptrend once the US stock market dips further.
He says a more dramatic correction in the equities market will force the Fed to change their tune on monetary tightening, which will then trigger bull runs in risk-on assets like cryptocurrencies.
“Right now, I see cryptos as basically a pawn in the ebbing tide. The Fed will keep jawboning, until the stock market – that’s the number one indicator, until [the stock market] goes down enough that [it] makes the Fed pause…
That’s when I think we’re going to see what’s already happening, accelerate. Bitcoin, Ethereum, and I don’t know the other ones, maybe Solana, to resume their outperformance trends, and they’ve already done a good job.”
McGlone says he believes that the Federal funds futures rate, which records the opinion of investors on where official federal funds rate will be at the time of contract expiry, could act as a “bottom indicator” for the crypto market. The analyst says that once investors reach a peak level of caution on the Fed funds futures, a reversal in sentiment may be underway.
“My key theme is if you want a good bottom indicator for Bitcoin and cryptos, it’s the Fed fund futures… it’s what the market expects the Fed to be doing a year from now. Right now, it’s priced for 3%, or maybe more, and the actual rate is 1%.
Once that forward expectation starts bottoming, I think Bitcoin is going to bottom.”
Bitcoin is changing hands at $38,558 at time of writing, a 2% increase from its 24-hour high of $37,840 while ETH and SOL and trading for $2,810 and $86.40 respectively.
I
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shuterstock/bima aldisa