The senior commodity strategist at Bloomberg Mike McGlone believes that the leading cryptocurrency by market cap, Bitcoin (BTC), could be in trouble, as its price chart resembles the 1930s stock market’s chart, following the major crisis that took place in 1929.
“One of the best-performing assets in history and a leading indicator — Bitcoin — appears similar to the #stockmarket in 1930.”
— Mike McGlone
More specifically, McGlone also makes a comparison to Roger Babson — a well-known statistician and entrepreneur back in the days — who “began warning about elevated equity prices” before this idea was brought by Irving Fisher in 1929, who proclaimed a “permanently high plateau” in 1929.
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McGlone seems to compare himself with Babson, as he points towards the similarities between Bitcoin’s chart from 2012 to 2023, with the stock market’s chart from 1920 to 1931. The senior commodity strategist blames the US Federal Reserve for shaping his bias towards “a stance similar to Babson’s”, in his words.
Bitcoin price analysis
Bitcoin has lost around 62% of its value since 2021’s all-time high of $69,000, being exchanged for as low as $25,900 by press time, as BTC struggles to recover its demand in a moment of uncertainty for the crypto market, as well as for the macroeconomy.
If Mike McGlone’s analysis is accurate, the leading cryptocurrency could be nearing a major drop that would surprise the vast majority of investors, like what happened in 1930.
Most Bitcoin analysts are expecting BTC’s price to start increasing soon, ahead of the block subsidy halving, which is set to happen in April 2024.
Many Bitcoin miners are already running their businesses ‘underwater’, as their current rewards are not enough to cover the costs for the activity that is responsible for securing the network and distributing new coins.
All things considered, the digital commodity’s ability to meet the above analyst’s expectations will depend on further developments related to Bitcoin, as well as the general sentiment on the wider crypto and macroeconomic landscape.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
