Senior Bloomberg commodities analyst Mike McGlone is saying Bitcoin’s (BTC) prospects over the long term look promising.
In a new Stansberry Research interview, McGlone says that he is “very bullish” on Bitcoin but warns that risk assets such as the flagship crypto asset face significant headwinds going forward.
“I’m very bullish on Bitcoin because of major reasons – it’s definable diminishing supply very low and [it’s] early days of adoption, you have to be long over time.
But it also trades 24/7 and it’s a very significant leading indicator and it looks like it just might have rolled over from $30,000. I just can’t see how we’re going to get what I view as a significant contraction in risk asset prices without Bitcoin, still a risk asset, going down.”
According to the Bloomberg analyst, the recent price gains Bitcoin has enjoyed are “absolutely” attributable to a “bear market rally.” McGlone says that when other correlated assets start declining in value in case a recession hits, Bitcoin will follow suit.
“I’m afraid what’s happening with Bitcoin is people are looking at it like the bank crisis has helped – it will go that way and trade more like gold and long bonds. But I think it’s more about everything’s up this year and Bitcoin’s the fastest horse in the race. It was the fastest on the way down, the fastest up this year…
Bitcoin’s up almost 80% in the year and it might just start to roll over. It trades 24/7, it’s clearly a leading indicator.
I view Bitcoin as, if markets do decline, which I expect… for instance, the S&P 500, I expect to drop for a normal recession probably another 25%, Bitcoin should probably be the first one to lead it because it’s still a risk asset.”
Bitcoin is trading at $28,880 at time of writing. The flagship crypto asset opened the year at around $16,500 and rallied by nearly 90% to a 2023 high of $31,000 reached earlier this month.
McGlone says that over the long term, Bitcoin will trade like a safe haven.
“I’m thinking long term, it’s [Bitcoin] going to come out ahead and trade more like gold and long bonds as a risk-off asset. But it’s still a very risky asset.”
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