In recent months, the probability of a recession in the US economy has risen, coinciding with efforts by the Federal Reserve to address the challenge of containing inflation.
Amid growing concerns, Bloomberg's senior official product Strategist Mike McGlone has asserted that all indicators suggest that an inevitable recession is on the horizon.
According to McGlone, the economy is "tipping" into a recession, pointing to factors such as the Federal Reserve's tightening policies, underscored by interest rate hikes, he said during a interview with block macro the 17th of May
โWe are leaning into a severe recession that hasn't even started, and all indications are right now. <โฆ> There is nothing that you see on radar up close that can stop this downward trajectory at this time,โ he said.
He noted that some indicators include possible earnings contraction, stagnant market performance, declining copper and natural gas prices, and record low unemployment rates.
At the same time, despite expectations of a turnaround once the Federal Reserve implements monetary easing in response to its tightening policies, the strategist predicts that such a reversal is unlikely based on historical patterns. In fact, he projected a challenging future for most investment products, such as CRYPTOCURRENCIES and Actions.
Impact on cryptocurrencies
Furthermore, McGlone anticipates a challenging phase for altcoins, envisioning a substantial correction as the stock market goes on a downward trajectory.
The strategist also offered information on Bitcoin (BTC), which suggests that you are about to establish a new bear market fund in the midst of this period of market turmoil. Interestingly, it anticipates a market downturn that will likely wipe out most cryptocurrencies.
โMy base case is [the S&P 500 index] going to 3,000, Bitcoin is going to go down, I don't know how much. It could make a new low. <โฆ> Cryptocurrencies will fall very hard. We are going to purge some of these 24,000 cryptocurrencies. Get rid of some. They are fools. But Bitcoin, Ethereum will pull through,โ he added.
McGlone claims that despite the stock market crash, Bitcoin is unlikely to outperform other assets.
โIf we don't take the stock market down, I don't expect Bitcoin to outperform in that case. So there's kind of a win-win,โ he said.
Meanwhile, Bitcoin continues to trade below $27,000 after failing to build momentum above $30,000. At press time, the original cryptocurrency was trading at $26,894.
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Watch the full interview below:
