Bitcoin and Crypto Face 'Lose-Lose' Fed Trap as Stocks Near Historic Extremes

Bloomberg Intelligence strategist Mike McGlone warns that Bitcoin and crypto face a 'lose-lose' scenario as the Federal Reserve tightens policy while US equity valuations remain near historic extremes.

The S&P 500's Shiller CAPE ratio is around 41, approaching the dot-com era's 44.2 peak, with six of Bank of America's other valuation indicators also implying negative long-term returns for stocks.

McGlone argues that crypto loses under either macro outcome: if inflation remains persistent, the Fed can keep rates elevated or tighten further, restricting liquidity; if tighter policy eventually breaks the equity rally, crypto could lose in a broad risk-off move.