According to senior macro expert Mike McGlone from Bloomberg Intelligence, the emergence of a recession could be the biggest challenge that Bitcoin has faced since its arrival in the late 2010s. With predictions of July to be a starting point of decline in economic activity, the crypto community is concerned about how it will impact the digital currency market.
The question of how the markets will respond as the United States heads toward a recession is on everyone’s mind. Bloomberg Economics’ model forecasts that a recession may commence in July, which creates uncertainty about the future of BTC and other cryptocurrencies. The market’s reaction to these upcoming changes and the impact it will have on digital currencies is still unknown.
Mike McGlone cautions that cryptocurrencies may face headwinds if the stock market is affected by Federal Reserve tightening and deflating commodities. The Nasdaq 100 and Bloomberg Galaxy Crypto Index have both increased approximately two times since the end of 2017, but they may be prone to the impact of a quantitative tightening of liquidity, according to McGlone.
The BGCI has witnessed a surge by more than 50% this year, compared to the stock index’s 20%. This may imply optionality risks, with a soft landing somewhat priced in contrast to the potential for an elongated economic contraction, says McGlone. The federal funds rate is still rising and is 5% now. This may suggest that the impact of withdrawing the stimulus is yet to come, according to Bloomberg’s expert.
Source: https://u.today/countdown-to-crypto-chaos-top-analyst-reveals-why-july-is-crucial