Bloomberg Strategist Mike McGlone Issues Urgent Market Warning, Says Crypto Will Be ‘First Place To Get Hit’ if US Stocks Start To Correct – Here’s His Outlook

Bloomberg’s senior commodity strategist Mike McGlone says crypto assets could face a downturn in prices if equities undergo a correction.

In a Kitco News interview, McGlone says if the “excessive valuations” of US equities start to correct, the “first place to get hit” could be crypto assets. According to McGlone, crypto assets are currently also overvalued.

“It’s just a classic indication of a market that’s gone too far. But remember it’s correlation… cryptos to the stock market, is the highest ever. I look at 48 months because it’s a four-year cycle. It’s around 0.6. In 2020, it was negative.

So the whole crypto space is clearly a risk-on space and gold’s clearly a risk-off space. Yet the stock market’s still up 15% of the year.

So my point is if we just give back some of those gains, you’re going to see the truth about unlimited supply, massive hubris, speculative excesses [of crypto] that reminds me of the internet bubble in 1999 and 2000, just many times more.”

McGlone further says that Bitcoin (BTC) is likely to underperform gold going forward.

“Well, one of my favorite ratios I’ve watched for over a decade is Bitcoin to Gold. The amount of ounces of gold is equal to one Bitcoin. Right now, it’s 29.5. The high when President Trump got elected was 40. The low this year is 25. To me, the risks are that this goes back below 25 as we find out that this has been a great leading indicator for the stock market and risk assets.”

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