- Bloomberg’s Senior Strategist Mike McGlone says the Fed’s interest hikes would affect risk assets like BTC.
- The necessity of the assets to be resilient at the beginning of March was asserted by McGlone.
- The ambiguities regarding the possibilities of BTC diving down toward a weaker position, came under McGone’s discussion.
Mike McGlone, the Senior Commodity Strategist for Bloomberg Intelligence, the research arm of the television network Bloomberg, asserted that the risk assets including Bitcoin would be highly affected by the continuous interest hikes by the Federal Reserve.
Interestingly, the Senior Strategist reiterated that the efforts of the Fed to lower inflation, despite the chance for a recession, would be a “headwind” to the crypto assets, noting:
Fed tightening despite the risk of a recession could be a primary headwind for most risk assets, notably cryptos. Buy-and-hold investors may warrant some protective insurance for the potential that the bear market isn’t over.
Notably, McGlone shared a Twitter thread on his official account commenting “don’t fight the Fed.”
Significantly, McGlone posed the necessity of the risk assets, especially crypto, to stay resilient at the beginning of March, “as the federal fund rate was zero a year ago and is still approaching 5%”.
In addition, he raised the ambiguities regarding the current position of the crypto, adding whether it could dive deeper into a lower position than in 2022. He stated:
What if crypto, equity haven’t yet seen their lows? Crypto and equity prices have bounced, which may leave them vulnerable to resuming 2022 downward trajectories. The stock market can be one of the world’s most powerful forces when it declines, and Fed tightening amid elevated recession risks are solid headwinds.
Further, he reaffirmed that this month would prove whether crypto would remain resilient despite the Fed’s tightening monetary policy, referring to the key price level for Bitcoin as $25,000.
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