According to McGlone, the “Great Reversion,” a massive rotation from paper assets to physical assets, could hit Bitcoin the hardest, which he sees as a speculative risk asset.
McGlone described Bitcoin’s current performance as “disappointing,” noting that the cryptocurrency has lagged significantly behind the NASDAQ technology index this year.
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Contrary to expectations that Bitcoin will reach $100,000, analyst McGlone predicts the price could drop to $10,000, effectively dropping a zero. Noting that there are over 28 million cryptocurrencies in circulation, McGlone argued that the “supply machine never stops,” creating a speculative excess. He suggested that a large portion of these assets should be reduced to zero, necessitating a significant “purge” in the market.
The strategist noted that Bitcoin’s ratio to gold has fallen by 50% from its peak levels, and modeled that this decline could continue by another 50% next year, potentially dropping the ratio to 10.
He argued that the first critical level for Bitcoin in a potential stock market correction is $50,000, but the real risk is a much deeper pullback.
*This is not investment advice.
Continue Reading: Bloomberg Analyst McGlone Issues “Great Depression” Warning for Bitcoin
