A commodity strategist has vowed that Bitcoin will bounce back strongly from a bear market despite headwinds for riskier assets.
Bloomberg analyst Mike McGlone called Bitcoin (BTC) a “wild card” which is “ripe” to outperform when traditional funds ran out
In a September 7 post on LinkedIn and Twitter, McCleone explained that while the US Federal Reserve shutdown is shaping the direction of the stock market, Bitcoin remains a “wild card” that could buck the trend, stating:
In a Sept.7 post on Linkedin and Twitter, McGlone described that while the United States (U.S.) Federal Reserve tightening will likely determine the direction of the stock market, Bitcoin remains a “wildcard”
“Bitcoin is a wild card that’s more ripe to outperform when stocks bottom, but transitioning to be more like gold and bonds.”
In the September 7 report, commodity strategists noted that Bitcoin is poised for a strong bear market rally despite “strong headwinds” for risk assets.
“It’s typically a matter of time for the fed funds gauge to flip toward cuts, and when it does, Bitcoin is poised to be a primary beneficiary.”
The report notes that while Bitcoin has a similar trend to stocks and gold, Ethereum (ETH) “may have a higher correlation with stocks.”
The Federal Reserve’s increased quantitative tightening comes amid several major interest rate hikes through 2022, the most recent of which was 75 basis points on July 27.
While it’s unclear exactly when the Fed’s quantitative tightening will end, some economists predict the reversal will come “at some point in 2023” according to a Bloomberg article published in August.
Quantitative tightening is a short-term monetary policy tool used by central banks to reduce the money supply and liquidity of the economy to reduce spending across markets, such as stocks.
But despite Bloomberg’s bullish take, other analysts believe that Bitcoin and equity markets are more closely related than ever.
CoinTelegraph contributor Michael Van de Pop recently.
Cointelegraph contributor Michaël van de Poppe recently revealed that the correlation between the S&P 500 and Bitcoin is approaching 100%, while many economists at the IMF say that the correlation between cryptocurrencies and stock markets in some parts of the world is 10 times.
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