Bitcoin's Rally May be Final Warning of Crash, Strategist Warns

A top Bloomberg strategist is warning that Bitcoin's current price around $60,000 may not be the long-awaited cyclical bottom. According to John McGlone, large investors are unlikely to hold onto their positions in volatile Bitcoin, which generates no passive income, as risk-free U.S. Treasury bonds offer a guaranteed yield of 4.95%, 5.00%. This has led to an unprecedented liquidity shortage in the crypto market.

The strategist notes that the current rebound to $86,200 may be a final warning of a crash, and a rare opportunity for investors to set aside cash for buying at much more attractive lows. McGlone draws parallels with the 2008 crisis, citing WTI crude oil's downward price path since its first month-end close above $100 a barrel in February 2008.

Historical economic cycles and Bloomberg Intelligence's calculations suggest that the real, fundamentally justified bottom for Bitcoin is at $10,000. With Treasury yields still around 5%, September's rally looks like a temporary reprieve, giving investors a chance to exit the overheated asset above $80,000, wait for the true liquidation phase, and enter the market at the lows.