Bitcoin (BTC), the largest digital currency by market capitalization, appears to be facing its first pronounced recession in the United States. According to the Senior Macro Strategist for Bloomberg Intelligence, Mike McGlone, Bitcoin may be facing its first official recession in the United States.
McGlone’s short-term position on Bitcoin
The top market strategist recalled that digital currency was born after the 2008 financial crisis. He noted that as things stand, the cryptocurrency’s performance implications appear to be leaning unfavorably toward the end of the second quarter, which ends this month. Bloomberg Economics’ view of an “ugly” second half of the year positions Bitcoin as a possible underdog compared to gold.
Maturing #Bitcoin vs. Recession, Fed, Weak Technicals – Born of the financial crisis, Bitcoin may face its first US #recession, and performance implications appear to be leaning unfavorably toward the end of 2Q. Bloomberg Economics’ view for an “ugly” 2H may tilt risk… pic.twitter.com/W0xNEKFce8
— Mike McGlone (@mikemcglone11) June 9, 2023
The analysis shows that gold may shine in the presence of a full-blown recession as it is historically wont to do, a move which, if it arises may not favor BTC due to its risk-asset status.
While predicting the exact performance of the digital currency appears difficult due to the broad uncertainty that surrounds the asset, it is worth noting that Bitcoin in itself has maintained some level of resistance to the negative sentiment surrounding the market since the start of the year.
Many investors are still bullish on Bitcoin even though the coin is currently trading below the $27,000 resistance point. Part of this trust in the coin’s future is the $1 million price target that star investor Cathie Wood is maintaining in the cryptocurrency in the long term.
Since the United States SEC has been cracking down on cryptocurrencies, Bitcoin has never once been indicted as a security. This is a positive position for the digital currency as the regulatory hurdles it has to deal with are external and can easily be survived.
Bitcoin also survived the implementation of a 30% tax on mining in the U.S., which would have been part of the debt ceiling bill. In all, there are still favorable regulatory upsides that can support any potential growth by Bitcoin.