Bloomberg Intelligence analyst Mike McGlone says it’s the top two cryptocurrencies by market cap that will lead to the most gains after the recent price dip that affected all asset classes.
In a new interview with Yahoo Finance, McGlone pinpoints the Federal Reserve’s interest rate hikes as being more detrimental to the US stock market long term than proven digital assets like Bitcoin (BTC) and Ethereum (ETH).
“The key thing to remember if the stock market keeps going down, which is likely because the Fed needs it to go down and reduce inflation, Bitcoin and Ethereum will go down, but they’ll come out ahead.
Overall, the volatility of these nascent crypto assets, most notably Bitcoin, has continued to decline versus the stock market. That’s what happened with Amazon when it first came out. Its volatility in 2009 was the same as with Bitcoin right now.”
McGlone says cryptocurrencies represent the next revolution on par with the likes of Amazon and other 2000s and 2010s market innovators and winners.
“Investors are looking forward to the future – do you really want to miss out on this revolution?
That’s what I see happening. A little bit of selling offers in the stock market and bids below in things like Bitcoin and Ethereum.”
At time of writing Bitcoin is up from its weekly lows under $27,000 after dropping from above $36,000 a week ago. It’s currently in the green by nearly 5% and priced at $29,843.
McGlone notes that despite BTC losing the $30,000 level, it’s not the only asset class in decline.
“It’s going down with the ebbing tide with all risk assets. What happened to the S&P 500 this week? It finally got below 4,000 for a while.
For the first time in about two years, both Bitcoin and the S&P 500 came back to the 100-week moving averages…
The asset that went up the most over the past five, 10 years is going to come back as the Fed hammers the punch bowl… It’s more likely to come out ahead.”
Ethereum is also bouncing back, having recovered the $2,000 level after falling to $1,824 on Wednesday.
ETH’s up 6.83% with a trading price of $2,047.
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