Bitcoin’s Latest Dip: Is It the Calm Before a Storm? – Bloomberg Expert Weighs-in
Bloomberg Intelligence's senior macro strategist, Mike McGlone, recently raised concerns about Bitcoin's latest correction, indicating potential challenges as central banks reverse their loose monetary policies.
Despite the possibility of US spot ETFs gaining approval and a strong stock market, Bitcoin has seen a 15% drop in the third quarter. McGlone suggests this could be a signal of an impending liquidity crisis.
Cryptocurrencies rose to prominence during a period of near-zero interest rates, making them susceptible to changes as rates rise. McGlone’s data, covering Bitcoin’s journey from $1 to $69,000, aligns with the idea that the leading cryptocurrency may experience corrections as interest rates increase.
A court ruling has pushed the US Securities and Exchange Commission (SEC) to reconsider approving Grayscale’s BTC ETF application for regulatory consistency. This regulatory development adds to the uncertainty surrounding the cryptocurrency market.
McGlone highlights the logic behind a digital asset like Bitcoin, which matured during a period of minimal and even negative interest rates, undergoing a correction as rates rise. Bitcoin’s apparent vulnerability might reflect its response to rapidly increasing interest rates.
READ MORE: Bitcoin’s Resilience and Scarcity: Catalyst for Crypto Boom
Federal funds futures are currently pricing in a rate of approximately 5.45% in November, a significant change from the 0.6% average observed from 2011 to 2021 when Bitcoin surged from $1 to around $69,000. This shift in interest rates could be a critical factor influencing Bitcoin’s future price movements.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
