Bitcoin has been making headlines for its impressive rally this year, but according to Bloomberg analyst Mike McGlone, there’s a catch. McGlone is very bullish on Bitcoin’s prospects over the long term, citing its definable diminishing supply and early days of adoption as major reasons to be long over time. However, he warns that risk assets, including Bitcoin, face significant headwinds going forward.
According to McGlone, Bitcoin’s recent price gains are attributable to a “bear market rally,” and when other correlated assets start declining in value in case a recession hits, Bitcoin will follow suit. He believes that Bitcoin is still a risky asset and that it’s impossible to get a significant contraction in risk asset prices without Bitcoin going down.
Despite the short-term risks, McGlone believes that Bitcoin will trade like a safe haven over the long term. He thinks that Bitcoin will come out ahead and trade more like gold and long bonds as a risk-off asset. However, it’s still a very risky asset, and investors should be cautious.
Bitcoin’s recent price movements have been impressive, with the flagship crypto asset rallying by nearly 90% this year to 2023 high of $31,000 reached earlier this month. At the time of writing, Bitcoin is trading at $28,880.
Overall, while Bitcoin’s long-term prospects may look promising, investors should be aware of the risks involved in investing in this volatile asset. As always, it’s essential to do your own research and make informed decisions based on your investment goals and risk tolerance.
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