Mike McGlone, an analyst at Bloomberg Intelligence, says blue-chip crypto assets will outperform other commodities by the end of the year.
In a new interview on the Scott Melker podcast, McGlone says leading digital assets Bitcoin (BTC)the top smart contract platform Ethereum (ETH) and the ETH competitor Solana (SOL) will continue their upward trend once the US stock market falls further.
He says a more dramatic one correction in the stock market will force the Fed to change its stance on monetary tightening, which will then trigger bull runs in risky assets such as cryptocurrencies will trigger.
“Right now I basically see cryptos as a pawn in the ebb. The Fed will keep chattering until the stock market — that’s the number one indicator, until [the stock market] that’s enough down [it] let the Fed pause…
Then I think we’ll see what’s already happening, accelerate. Bitcoin, Ethereum, and I don’t know if the others, maybe Solana, will resume their outperformance trends and they’ve already done a good job.”
McGlone believes the Federal Funds Future Rate, which tracks investor sentiment as to where the official Federal Funds Rate will be at the time the contract expires, could serve as a “bottom indicator” for the crypto market. The analyst says that once investors reach peak levels of caution on fed fund futures, a reversal in sentiment could be underway.
“My main theme is, if you want a good bottom indicator for bitcoin and cryptos, then it’s the fed fund futures…it’s what the market is expecting from the fed in a year’s time. Right now it costs 3% or maybe more, and the real rate is 1%.
Once this forward expectation starts to bottom out, I think Bitcoin will bottom out.”
Bitcoin is changing hands at $38,558 as of this writing, up 2% from its 24-hour high of $37,840, while ETH and SOL are trading for $2,810 and $86.40, respectively.
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Source: Crypto News Deutsch