Bloomberg's senior commodity strategist Mike McGlooun asserts that the collapse of cryptocurrencies could be a signal of impending economic turmoil and an unprecedented deflationary period.
Drawing historical parallels with the collapse of the US stock market in 1929, the bubble in Japan in 1989, and the dot-com bubble in the early 2000s, McGlooun suggested that the current fragility of the cryptocurrency market could be an early indicator of deep systemic problems.
McGlooun mentioned the 200-day moving average (MA) of the yield on 10-year US Treasury bonds, which is now on the verge of declining after reaching its highest level in nearly two decades.
Regarding the current fragility of the market, particularly the position of Bitcoin (BTC), McGlooun believes that the rise of the asset, which began in 2009 when the stock market hit bottom, may come to an end.
His concerns are heightened by the explosive growth of most altcoins, many of which are largely dependent on Bitcoin's momentum.
Furthermore, the expert believes that massive liquidity injections during the pandemic years created one of the largest monetary pumps in history, driving asset prices up across the board.
McGlooun does not rule out that the era of easy money has ended, and a sharp deflation of assets and significant market upheavals may follow.
This forecast is undoubtedly original, if only because all other analysts and traders predict a rise in Bitcoin to new price highs.
