Bloomberg’s commodity strategist Mike McGlone believes crypto markets will be in a better position in the next six months.
Speaking on his Twitter account, McGlone compared the current state of the crypto industry with the state of the stock market in 2000-2002. At that time, the dot-com bubble emerged as a result of the massive spread of internet technologies.
After that, after the market clearing and deflation, this market segment assumed a more fundamental role in the financial system. In McGlone’s view, the first half of the year witnessed something of a purge of excesses.
To strengthen his argument, the analyst took a graph of the Wilshire 5000 Total Market Index ratio to US GDP, popularized by Warren Buffett. This chart shows at what level valuations are in certain periods. With this graph, it is seen that the current situation of financial markets is similar to the crises of the early and late 2000s. Investors can see that we have just reached the crisis point by looking at the chart of the analysts. This means that there may be a further decline in the future.
On the other hand, McGlone states that cautious investors will have a better chance of taking better positions in terms of reward/risk in the second half of the year. McGlone bases his optimistic assumptions on the Bloomberg Galaxy Crypto Index. Accordingly, the 50 and 100-week moving averages are similar to 2018.
What Stops the Proliferation of #Crypto Dollars? The about 80% drawdown in the Bloomberg Galaxy Crypto Index is indicative of limited further downside and the proliferation of crypto dollars. Our graphic depicts a top consistency in cryptos — the rising tokenization of the buck pic.twitter.com/DClItGPVGy
— Mike McGlone (@mikemcglone11) July 6, 2022
McGlone also said that Bitcoin adoption is likely to continue increasing.
