With the second half of 2025 already underway, Bloomberg Intelligence senior commodity strategist Mike McGlone has warned that this year could mark the beginning of a major stock market downturn.
McGlone projected that 2025 may usher in the third major 50% drawdown in stocks since 2000, he said in an X post on August 2.
His warning comes as the stock market opened August on a weak note, with investor sentiment turning bearish following disappointing jobs data and a sweeping rollout of trade tariffs by the White House. To this end, the benchmark S&P 500 closed at 6,238, down 1.6%.
According to McGlone, market behavior throughout 2025 has been marked by growing caution and shifting capital flows.
In this case, gold and U.S. Treasury bonds, long viewed as safe havens, have outperformed riskier assets, while cryptocurrencies have lagged despite a seemingly favorable macro environment.
Assets to watch out for
McGlone now expects gold and bonds to continue outperforming, with speculative assets like crypto taking the brunt of the correction.
“Base case update: I expect 2025 to be a down year for the US stock market, marking the beginning of the third 50% drawdown since 2000. Gold and T-bonds are poised to be top performers, while cryptocurrencies are likely to be the worst,” McGlone said.
To highlight his view, the strategist noted that the Bloomberg Galaxy Crypto Index (BGCI) is roughly flat year-to-date, mirroring the performance of the S&P 500. Given crypto’s higher volatility, this stagnation is being seen not as a sign of resilience, but as a red flag.
His analysis was further supported by comparing the 200-day moving average (MA) of the CBOE Volatility Index (VIX) with the Gold-to-S&P 500 ratio.
Historically, spikes in this ratio have preceded major stock market corrections. The gold/SPX ratio has been steadily rising in 2025, suggesting a gradual investor rotation from risk to safety.
Interestingly, the current setup bears resemblance to previous market turning points, notably the 2008 financial crisis and the 2020 pandemic crash. Therefore, if past patterns hold, 2025 could mark the early stages of a prolonged equity revaluation.
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