According to Bloomberg senior commodity strategist Mike McGlone, Bitcoin will reach $100,000 by 2025.
Nothing has to happen for the bullish bitcoin outlook to become a reality, he qualifies, since the supply of bitcoin is capped, and adoption and demand are on the rise. Ethereum, he says, is “a different animal,” and it’s reaching $6,000 is contingent on the expected timeframe.
Speaking with Kitco News, McGlone said that the Federal Reserve’s “sledgehammer” has been putting pressure on crypto in the short term. With housing markets and bonds down, he adds, this could be one of the worst bear markets of the current generation, but bitcoin is going to trade like gold and long bonds, government bonds with a 30-year maturity. He sees Ether as highly correlated with the tech-heavy Nasdaq.
The crucial aspect of cryptocurrencies is that their market cap is around $1 trillion and will “really make a difference” in five or ten years, even as equity markets are poised for further pain with the prospect of further interest rate hikes.
This sentiment comes as bitcoin touches $20,080.12 at press time, down from roughly $22,500 on Sep. 13, 2022. Ethereum is trading at $1,469.01, down from pre-Merge highs of $1,784.00, data from CoinMarketCap indicates.
Risk assets must go lower, expert says
For the Fed to stop its aggressive interest rate hikes that portend a recession, McGlone says, markets, including cryptocurrencies, must go down. “I don’t see what stops [a recession]…other than risk assets going lower and reaching a lower plateau,” he said.
He noted that gold, like bitcoin, will eventually come out on top when things recover. Cryptos have the advantage of being the fastest horse in the race.
McGlone also weighed in on the recent Ethereum Merge, saying that institutional adoption will likely be driven by the ability of institutions to perform a discounted cash flow for Ethereum. Discounted cash flow evaluates an investment now based on future returns.
For Ethereum to flip bitcoin’s market cap, McGlone believes a favorable macroeconomic environment is required. “I don’t see that for a while,” he said.
Not likely to happen with a 75 basis point hike
Following favorable producer price index numbers earlier this week, Credit Suisse chief equity strategist Jonathan Golub believes that the Fed would likely pause interest rate hikes. The markets have already priced in a 75 basis-point hike, Be[In]Crypto reported on Sep. 14, 2022. McGlone also agrees, dismissing the idea of a 100 basis point hike because the Fed would not want to be blamed for a stock market crash.
Tedtalksmacro, who provides insight into how macroeconomic conditions affect bitcoin, agrees with McGlone, “At the time of writing, the market has mostly priced in a 75 bps hike and has discounted the likelihood of a 100 bps hike.” The CME Group’s FedWatch tool suggests that the probability of a 100 basis point interest rate hike is just 18%.
A 75 basis point hike is already priced in, so bitcoin shouldn’t be too adversely affected, Tedtalksmacro said.
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