According to Bloomberg Intelligence’s senior macro strategist, Mike McGlone, Bitcoin (BTC) may face a significant challenge in the second half (2H) of 2023.
McGlone believes that after a promising first half of the year (1H), Bitcoin might have to weather difficult economic conditions in the next six months. He predicts that the stock market will experience a decline, providing Bitcoin with an opportunity to demonstrate its value as a store of value or “digital gold” by remaining stable despite the drop in equities.
“Bitcoin’s 84% gain in 1H was about double that of the Nasdaq 100 and consistent in annual volatility (risk-adjusted). It’s 2H that may define the benchmark crypto as a high-beta version of the stock market, or for its potential to be digital gold in a world going that way.”
He continued and stated the following:
“Our bias is somewhat in the middle. We view a true test of Bitcoin is likely to come when the stock market enters a bear market at some point, typical in US recessions.”
McGlone also warned about the fact that while in past recessions, the Federal Reserve was quick to ease monetary policy, the central bank may be reluctant to do so this time around due to high inflation.
“During the two major economic contractions since the start of the millennium, drawdowns of about 50% in the S&P 500 were accompanied by substantial central-bank easing. That may have changed. Bloomberg Economics points out that the Fed is unlikely to ease due to stubborn inflation. Our graphic shows Bitcoin hovering at the $30,000 pivot, but trailing the Nasdaq’s 2Q rush.”
Regarding Bitcoin’s price today, at the moment of writing this article, BTC is trading in the green and the king coin is priced at $30,182. Stay tuned for more news from the crypto space and make sure to check out the markets as well.