According to a senior analyst at Bloomberg, Bitcoin faces more risk than the Dow Jones Industrial Average, an benchmark stock index.
Bitcoin Comment from Bloomberg Strategist Mike McGlone
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that Bitcoin is currently riskier than the Dow when the crypto price first matched the index in the first quarter of 2021, which could have negative implications for the crypto market.
Dow 30,000 and Peak #Bitcoin. Bitcoin is riskier now vs. the Dow than when the price of the crypto first matched the index in 1Q21, which may have bearish crypto implications. My concern is the #stockmarket may face a normal recession-related decline, priced out of most outlooks pic.twitter.com/QBmpdHIA8J
— Mike McGlone (@mikemcglone11) August 6, 2023
McGlone wrote in his tweet:
Bitcoin crossed the Dow when it first broke above $30,000 in January 2021, and this level has acted as a turning point ever since.
Our currently resisting chart shows that the annual Bitcoin volatility is about 3 times the stock index; It was just under 2x in the first quarter of 2021.
McGlone added that adding a highly volatile asset to a portfolio often creates little incentive to add that asset unless it increases overall returns through diversification.
McGlone also expressed his concerns that the stock market may face a normal drop due to the recession that has priced in many aspects and put Bitcoin under pressure.
The analyst continued in his statements as follows:
“Bitcoin is currently riskier compared to the Dow Jones Industrials Average compared to when the BTC price first matched the index in 2021, which could lead to a bearish in crypto.”
*Not investment advice.
