Bitcoin could be one of the greatest bull markets in history at a relatively discounted price to start 2H (second half). Or the crypto may be a failing experiment in the process of being made redundant, like crude oil, said Bloomberg’s commodity strategist and analyst Mike McGlone.
“Our bias is Bitcoin adoption is more likely to continue rising,” he said in a series of tweets sharing outlook on world’s top and most popular cryptocurrency Bitcoin.
Talking about the midyear outlook on the crypto assets, McGlone said – “A common theme in cryptos is to embrace the bear and build a better financial system, notably from the institutional and longer-term focused, akin to 2000-02’s bursting internet bubble. Purging the excesses was the state of all risk assets in 1H.”
“What Stops the Proliferation of #Crypto Dollars? The about 80% drawdown in the Bloomberg Galaxy Crypto Index is indicative of limited further downside and the proliferation of crypto dollars. Our graphic depicts a top consistency in cryptos the rising tokenization of the buck,” he said.
With the Bloomberg Galaxy Crypto Index nearing a similar drawdown as the 2018 bottom and Bitcoin’s discount to its 50- and 100-week moving averages similar to past foundations, risk vs. reward is tilting toward responsive investors in 2H, as per McGlone.
The crypto industry has been shaken by a series of collapses in recent months including the failure of so-called stablecoin TerraUSD, large U.S.-based lender Celsius network pausing withdrawals and Singapore-based crypto hedge fund Three Arrows Capital entering into liquidation.
Bitcoin is down 58% in the first six months of 2022, hovering around $20,000 currently, its worst first half of year showing ever as digital assets have struggled.
Crypto miners are struggling to repay debt and complete large purchase orders of expensive mining machines they made during the bull run several months ago.
Bitcoin miners have been forced to tap into their cryptocurrency stashes as a plunge in prices, rising energy costs and increased competition bite into profitability. The miners needing to sell could weigh on the Bitcoin’s price for some time, JPMorgan Chase & Co said in a note last month.
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