Bitcoin's Stock Market Ties Pose Risk of $10,000 Crash
Bloomberg Intelligence senior macro strategist Mike McGlone is warning that Bitcoin has become too dependent on stocks, and this could be bad news for investors. In a new review, McGlone notes that Bitcoin's correlation with U.S. equities has increased significantly, making it vulnerable to systemic shocks.
The price rebound in Bitcoin stalled at $76,746, failing to break above the key psychological barrier of $80,000. Additionally, one-year federal funds futures are pricing in another 70 basis points of Fed rate hikes, draining liquidity from speculative markets.
The S&P 500 has moved critically far above its 200-week moving average, sharply increasing the risk of large-scale profit-taking by institutional investors. McGlone calculates that if the S&P 500 enters a natural correction phase and loses 20%, Bitcoin will inevitably plunge toward its long-term fundamental pivot in the $10,000 area.
This close relationship with Wall Street makes the crypto market vulnerable to systemic shocks. According to McGlone's analysis, Bitcoin no longer functions as a defensive asset, exposing investors to nearly three times as much volatility as the S&P 500 over the past five years.