US Debt Default Threatens Crypto and Stock Markets, Bloomberg Strategist Warns
Bloomberg Intelligence’s senior commodities analyst, Mike McGlone, has issued a stark warning that a potential US debt default could have a significant impact on crypto and stock markets.
He recently made his comments during a recent Wolf of All Streets roundtable discussion, where he stated that he is bearish on crypto assets and stocks, while bullish on gold.
Alarming Prospects of US Debt Ceiling:
McGlone’s concern is rooted in the possibility that the US may default on its debt, with Treasury Secretary Janet Yellen having recently mentioned the word ‘default’ during negotiations to raise the US debt ceiling before the June 1st deadline.
Getting deep into his analysis he argues that a default could significantly impact risk assets, stating that
“It keeps me very bullish on things like gold, very, very bearish things like the stock market and broad cryptos because I don’t think this is going to come to an agreement until markets make that.”
These comments have made him more bullish on gold and negative on stocks and cryptocurrencies.
Gold Shines, Stocks, and Cryptos Suffer
He justified his claim with the 2011 market downturn, where the stock market dropped significantly due to the debt crisis. However, he believes that an agreement will eventually be reached as policymakers will realize that a global economic crash is imminent.
However, amidst the crisis, he says there is a ray of hope. Once an agreement is reached to raise the US debt ceiling, he believes risk assets will rally. In his best-case scenario, waking up to the news of an agreement would trigger a surge in risk assets, with Bitcoin potentially benefiting the most.
Final thoughts
He concluded his stance by suggesting that the most probable outcome is that the market’s reaction to the potential US debt default will exert pressure on policymakers to reach a resolution. This pressure would likely result in the debt ceiling being raised to avoid severe consequences for the global economy.
As the June 1st deadline looms, the fate of crypto and stock markets hangs in the balance. Investors are advised to stay vigilant and monitor the developments closely.
Bitcoin’s Epic Climb: Top Strategist Sets Timeline for New All-Time Highs
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, has expressed a strong belief in Bitcoin’s potential to reach new all-time highs. In a recent Fox Business interview, Hougan predicted that the leading cryptocurrency would not only break through the $30,000 barrier in the near future, but also achieve new all-time highs by next year.
A Rocky Road to Recovery
The crypto markets faced a challenging period last year, with several scandals and rapid growth causing instability. Despite these obstacles, cryptocurrencies have shown resilience and are now on track to recover from the fallout. Hougan notes that the crypto market has cleaned up and reset, with Bitcoin’s impressive 77% year-to-date increase cementing its position as the world’s best-performing asset class.
In light of this progress, Hougan is optimistic about Bitcoin’s future trajectory. As per his assessment, the $30,000 threshold is well within our grasp, albeit not in the immediate future.
While he remains optimistic about the prospects, he cautioned against expecting record-breaking heights this year. Nevertheless, he expressed a strong belief that we will indeed scale these heights by the next fiscal year.
Navigating Uncertain Waters
While Bitcoin’s short-term price action remains unpredictable, traders and analysts are paying close attention to longer-term trends. Rekt Capital, a popular trader, and analyst, has pointed to the possibility of historical bullish patterns confirming the end of the bearish trend seen last year. In a tweet on April 27, they highlighted Bitcoin’s break from its downtrend and emphasized the need to continue the new uptrend.
Regulatory Hurdles for the Crypto Industry
One of the main challenges faced by the cryptocurrency industry is the need for clear and comprehensive regulation. Hougan criticized SEC Chair Gary Gensler for attempting to apply rules created in the 1930s to modern technological innovations. He remarked:
“This is the only industry in America that’s begging for more regulation. We’re asking for more rules, more clarity, so that the benefits can apply to the American people. And Gensler and the SEC are trying to apply these rules that were written in the 1930s to a technology in the 21st century. It doesn’t work.”
As Bitcoin currently trades around $29,300, traders and analysts are keeping a close eye on its performance, hoping that the market leader will soon surpass the $30,000 mark and go on to reach new all-time highs.
Top Crypto Strategist Predicts Bitcoin (BTC) Will Surpass Ethereum (ETH) at Lightning Speed
Bitcoin has always been synonymous with cryptocurrency and has been the most valued in the industry for several years. However, in 2022 several people were claiming that with the merger ETH will take over BTC to be the king asset of crypto.
With the recent Ethereum enhancements, the native Ether token has witnessed a significant increase in popularity. This price was projected to climb in the future year (2022), with many financial and cryptocurrency experts expecting that ether will overtake bitcoin.
Kaleo’s prediction for BTC
Pseudonymous analyst Kaleo informs his 562,700 Twitter followers that the Ethereum/Bitcoin pair (ETH/BTC) is presently trading below a diagonal trendline, implying that ETH will likely trail BTC in terms of gains. He claims that the high timeframe support line was ultimately broken by ETH/BTC.
Expect BTC to start outpacing a little faster at some point in the upcoming weeks. A bearish ETH/BTC chart traditionally shows that Bitcoin will likely increase in value more quickly than Ethereum and the overall altcoin market.
Looking at Bitcoin specifically, Kaleo predicts that BTC will likely reach the $30,000 price level after successfully bouncing off support at roughly $21,000. High timeframe support has been remarkably stable. Currently, at 4,000 support, the SPX (S&P 500 index) is still expected to rise to 4,300 in the upcoming weeks. A magnet is $30,000.
According to Kaleo, Bitcoin will probably gain further momentum in the near term if it overcomes resistance at $22,400. The CPI was somewhat higher than anticipated, and the market is essentially flat. After some initial instability, SPX and NDX [Nasdaq-100 Index] is ready for a run higher, while BTC is vying to retake a significant level it lost last Thursday. A magnet is still $30,000 and up.
Crypto Bloodbath on Feb 1st? Market Strategist Foresees Intense Turmoil
The bankruptcy of FTX, a $32 billion crypto exchange, has shaken investor trust in cryptocurrencies. Market participants are constantly attempting to assess the degree of the harm done and its effect on business in the coming years. In one of the greatest crashes ever, the prices of all major cryptocurrencies plunged immediately after FTX filed for bankruptcy.
However, it appears as if the tide has begun to turn since the beginning of 2023. The top players are rallying major assets. However, the influence of the most recent federal meeting increase in interest rates may be seen in a loss of gains across markets.
As a result of the recent Fed meeting, the cost of capital for companies is increasing, lending conditions for consumers are undoubtedly tighter, and there is still ambiguity about the level at which the Fed will pause its rate hikes to try to moderate inflation.
The Upcoming Fed Meet
Equities, precious metals, and cryptocurrencies have been on a tear in the final three weeks of 2023, and all eyes are now on the next Federal Open Market Committee (FOMC) meeting, which is taking place on January 31st and February 1st.
Governor of the Federal Reserve Christopher Waller stated on Friday that he supports raising the benchmark interest rate by a quarter point at the upcoming FOMC meeting. Analysts predict that the conclusion of the forthcoming Fed meeting will have an impact on the market’s present trajectory.
On Jan. 27, a market expert known as “The Carter” stated that “there will be blood on February 1,” referring to the market upheaval that may occur when Powell addresses the country. While some investors anticipate a dovish Fed and rate reduction, Carter believes Powell will continue to tighten and adopt restrictive policies.
The analyst points out that Powell previously discussed a “broader tightening project” in three stages: rapid hikes to reach a neutral rate, gradual hikes to reach a “sufficiently restrictive” rate, and staying at the terminal rate for a while.
Vermeulen’s Prediction
Chris Vermeulen, CEO and Founder of The Technical Traders, analyses the most recent surge. He explains that he expects gold, silver, and miners to reach a major bottom in the first half of 2023, but adds that this will be followed by a multi-year rally.
While metals may hold up till the end of the year, he still expects a “big top” in the stock market and a corresponding surge in the US dollar.
Bitcoin Could Crash by Nearly 40%! Bloomberg Strategist Lays Out The Timeline
The market valuation for all cryptocurrencies decreased by 24% to $770 billion between November 8 and 10. Asset values rose 16% as fear receded and forced future contract liquidations lessened.
Moreover, Bitcoin (BTC) might fall to the earlier July values back in 2020, according to Bloomberg Intelligence senior macro strategist Mike McGlone.
With due diligence looming over the asset class, there is a lot of panic in the cryptocurrency community right now, and the future looks gloomy for altcoins. Experts like Mike and others are constantly cautioning investors to remain vigilant before purchasing any tokens right now.
In the interim, Mike has pointed out that, throughout the coming weeks, the price of Bitcoin may decline by 39% from its current level and revert to the support level of $10,000.
McGlone’s Timeline
To provide clarity to the eager market participants, the macro specialist has now emphasized the difficulties risk assets will face in the future.
As expected, he stated that there is a possibility that BTC and other coins may see a massacre in the future, owing to the current capitulation period.
“Capitulation sell stops” might be triggered in other markets that have been under pressure this year if Bitcoin and other crypto assets were to collapse.
Then, he drew attention to the fact that, as of November 9, the great risk-asset regression of 2022 had already become apparent. Regrettably, the remaining trading sessions may, however, set the stage for 2023, with Bitcoin acting as one of the race’s fastest horses and top leading indicator, breaching the support and running the risk of returning to the $10,000 threshold.
The BTC trend, on the other hand, is currently trading at $16,362, down by almost 20% from the month’s high of $21,480 achieved last week. As a result, this can be interpreted as a clear sign that the prices may drop as predicted.
The failure of the FTX cryptocurrency exchange and the ensuing damage to Sam Bankman’s reputation, according to the senior macro strategist at Bloomberg Intelligence, will have a significant impact on the macroeconomic conditions. Investor confidence is rattled, which has had a negative influence on cryptocurrencies.
The Bottom line
Due to cryptocurrency frauds and the current political unrest, the largest asset class has lost its allure in the community, and a massive dump has made the situation worse. It will be intriguing to see what the trading trends of 2023 bring.
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Asia’s Largest Bank, DBS Strategist Says Bitcoin is Unique Regardless of Price
The post Asia’s Largest Bank, DBS Strategist Says Bitcoin is Unique Regardless of Price appeared first on Coinpedia Fintech News
Daryl Ho, DBS investment strategist discussed bitcoin in a recent media briefing as reported y Finews Asia on Friday. “If we look just on a price basis, you will notice a lot of volatility, and it doesn’t tell you a lot about what benefits it truly delivers,” he noted, adding:
Whether the price fluctuates or not, I believe bitcoin remains unique.
According to the publication, Ho went on to say that bitcoin’s uniqueness is driven by its usefulness, which facilitates value transfers in a decentralized way without the need for a central counterparty to execute the trade.