Bloomberg Intelligence senior macro strategist Mike McGlone is warning Bitcoin (BTC) and Ethereum (ETH) bulls that crypto and risk assets may be in for a correction.
McGlone shares a graphic with his Twitter following comparing ETH/BTC, the NASDAQ and the Federal Reserve money supply.
According to the analyst, the ETH/BTC pair may be acting as a leading indicator for risk assets, suggesting an incoming correction in the stock market and perhaps crypto as well.
McGlone says that markets may be adjusting to a developing period of disinflation brought on by the harsh reversal in monetary policy from the Federal Reserve.
“Don’t Blame $2,000 Ethereum, $30,000 Bitcoin. If risk assets peak, markets may be in early the days of adjusting to disinflation, which is normal in recessions, but the Federal Reserve may never loosen with the ease it has in the past. Enduring deflation could be reciprocal”
In a recent interview with Yahoo Finance, the Bloomberg analyst says that gold will likely be one of the best performing assets in the deflationary recession that he’s forecasting.
“I think it is pulling back a little today, but I think it’s inevitable that gold gets above this $2,000 an ounce level and never looks back. And the key catalyst is the stock market potentially rolling over…
So I see this as just the catalyst for gold to take off. It’s one of the few commodities I’m really bullish on because everything’s starting to tilt downward towards deflationary trends.”
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