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The senior macro strategist at Bloomberg Intelligence suggests that for Bitcoin (BTC) to experience a resurgence, it may require a prior decline in risk assets such as stocks. During a recent conversation with crypto trader Scott Melker, Mike McGlone expressed the view that Bitcoin’s upward trajectory might be hindered as long as the U.S. Federal Reserve refrains from implementing measures to increase monetary supply. McGlone pointed out a noteworthy trend: when comparing Bitcoin to the Nasdaq, historically, Bitcoin tends to perform well during periods of abundant , and conversely, its performance lags when liquidity is scarce. Given its relatively short existence, the historical context becomes even more pertinent. Currently, the situation indicates a significant lack of liquidity. McGlone noted this by referencing Fed fund data, which suggests a meager 5% rate over the next year. This paints a grim picture for the prospects of a liquidity boost. McGlone shared an additional perspective with his followers on the social media platform X, noting that the Federal Reserve might reconsider its cautious approach if the stock market experiences a substantial downturn. He proposed a potential scenario where the Fed faces a dilemma. It seems improbable that the Fed will inject liquidity in the near term due to persistent concerns. However, a pivotal event that could prompt a change in this stance might be a reversal of the factors that have supported interest rates this year – specifically, the enduring resilience of the stock market. The Bloomberg analyst also emphasized Bitcoin’s remarkable growth, having surged by a factor of 26,000 in just 12 years. Even if its value was to decrease by more than 63%, Bitcoin would still maintain an impressive performance. To put it in perspective, if were to regress toward the $10,000 mark, its historic performance would remain unparalleled.
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