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- Mike says it is not just crypto winter but everything winter.
- The only sector that is seeing profits is commodities. But it had to come down too.
- If not, Fed will keep tightening until they do.
Mike McGlone, a Senior Macro Strategies at Bloomberg Intelligence, shared his thoughts on the crypto market on December 6. In the latest edition of “Crypto Outlook.” Mike, along with three other contributing analysts, said:
The industry is facing a massive drawdown due to the cryptowinter and FTX collapse. BGCI (Bloomberg Galaxy Crypto Index) has been up by 200% since 2019. At the same time, gold has seen 20-60% movement, S&P 500, Bloomberg’s Commodity Spot index and US money supply to December 2. Now the question remains how much worse things can be? The bias is risk vs. reward. And BGCi is working towards resuming its predisposition to outperform.
Almost 70% of the BGCI in Ethereum and Bitcoin are evident for mitigating supply vs. increasing demand and adoption. The demand side of the equation has to be reversed somehow, or the price should rise over time by the rules of economics; we expect history to view 2022 crypto history as a significant dip with an elongated trend.
“The drop in value of the entire crypto market in 2022 to December 2 is about $1.3 trillion and is roughly equivalent to market-cap fal of Amazon and Google, which is indicative of promising stage.”
The aggressive FED deflation in 40 years is a great reason for the macroeconomics fading tide. 2023 seems to be different about which assets may come ahead as central banks axle. Without the easement, the world might deeply slip into recession, reciprocating for all risk assets. The base case here is the requirement of an elongated deflationary period; the crypto market, measured by BGCI, is supposed to be ahead.
In an interview given to Daniela Cambone, Anchor and Editor-at-Large at Stansberry Research, McGlone titled, “a subscription-based publisher of financial information and software.”
As per The Daily Hodl’s report, Mike said:
One doesn’t want to be too bearish when the market is down by 80%. He believes we are in the final stages of these bear markets for cryptos, and the way ahead will not be easy. The market does not generally make a V-bottom.
“They have to make it as difficult as possible and the key thing I’ve learned trading in markets, especially bear markets, is they’ll make you lose your hair, they’ll take money from everybody, and they have to be volatile and difficult. That’s the key thing….”
He suggests all be aware that it is not just crypto winter but everything winter except one asset class. Commodities need to go down also. If they do not, FED will keep deflating until they do.
Conclusion:
Every disaster is also a great chance to learn from mistakes and correct them. The recent FTX collapse, Terra ecosystem collapse, etc. Have wreaked havoc on the entire market. Making people distrust the industry entirely. Paradigm-altering reforms are required worldwide to see the industry back into its glory.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
