Skip to content

‘Severe recession’ unavoidable, finance expert warns, shares outlook for Bitcoin

'Severe recession' unavoidable, finance expert warns, shares outlook for Bitcoin

Over the past few months, the likelihood of a recession in the United States economy has increased, coinciding with the Federal Reserve’s efforts to address the challenge of containing inflation.

Amid mounting concerns, Bloomberg’s senior commodity strategist, Mike McGlone, has asserted that all indicators suggest an inevitable recession is on the horizon.

According to McGlone, the economy is ’tilting’ towards a recession, pointing to factors such as the Federal Reserve’s tightening policies, underscored by the interest rate hikes, he said during an interview with Blockworks Macro on May 17. 

“We are tilting down towards a severe recession that hasn’t even started, and all the indications are right now. <…> There’s nothing I see on the radar up close that what can stop this downward trajectory at the moment,” he said. 

He pointed out that some indicators include potential earnings contraction, stagnant market performance, declining natural gas and copper prices, and historically low unemployment rates. 

At the same time, despite expectations of a turnaround once the Federal Reserve implements monetary easing in response to its tight policies, the strategist predicts that such a reversal is unlikely based on historical patterns. Indeed, he projected a challenging future for most investment products, such as cryptocurrencies and equities

Impact on cryptocurrencies 

Moreover, McGlone anticipates a challenging phase for altcoins, foreseeing a substantial correction as the stock market undergoes a downward trajectory.

The strategist also offered insight into Bitcoin (BTC), suggesting it is poised to establish a new bear market bottom amid this period of market turbulence. Interestingly, he anticipates a market downturn that will likely wipe out most cryptocurrencies. 

“My base case is [the S&P 500 index] is going to 3,000, Bitcoin’s going to go down, I don’t know how far. It might make a new low. <…> Cryptos will go down real hard. We’re going to purge some of these 24,000 cryptos. Get rid of some. They’re just silly. But Bitcoin, Ethereum will come out ahead,” he added. 

McGlone asserts that despite a stock market crash, Bitcoin’s performance is unlikely to surpass that of other assets.

“If we don’t go down the stock market, I don’t fully expect Bitcoin to outperform in that case. So there’s kind of a win-win,” he said. 

In the meantime, Bitcoin continues to trade below $27,000 after failing to build momentum above $30,000. By press time, the maiden cryptocurrency was trading at $26,894.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Watch full interview below:

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.