Bloomberg commodity strategist Mike McGlone says that there’s a chance of a massive correction in US markets that could pummel the price of Bitcoin (BTC), oil and stocks.
In a post on the social media platform X, McGlone says the US has a “self-correcting mechanism” that may push back against President Trump’s tariff war, which could create market chaos.
[adinserter block="1"]The analyst shares a chart suggesting that the S&P 500 vs. GDP ratio and the S&P 500 vs. gold ratio are both at elevated levels – a setup that has historically marked stock market crashes, such as in the 1930s, the late 1990s, and 2008.
Such an event, or “reversion,” could result in significant drops in stocks, Bitcoin oil, copper and bonds, according to McGlone.
“America’s self-correcting mechanism is unstoppable. If unprecedented tariffs and austerity don’t work, pushback will come in the next elections. If the great rebalance attempt works, it could reset world order underpinnings for the coming century.
The problem is that the discombobulation is coming with US stock market cap vs. GDP and the rest of the world, the highest in about 100 years.
My normal reversion base case:
– 50% drawdown in the US stock market
– $40 a barrel crude oil
– $3 per pound copper
– 3% US 10-year yield
– $10,000 Bitcoin, 90% drawdowns in most of the millions of cryptocurrencies
– $4,000 gold, the outlier due to not being simple reversion”
While McGlone’s predicted drawdowns appear severe, the analyst says that the magnitude of the potential downside moves is “normal” based on historical terms.
At time of writing, Bitcoin is trading for $87,529.
Follow us on X, Facebook and Telegram
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
