Benzinga - Bloomberg Intelligence’s Mike McGlone likened Bitcoin (CRYPTO: BTC) to a teenager who has grown up on a high-sugar diet of extraordinarily low-interest rates and is now facing challenges amid changing economic conditions.
“Bitcoin typically outperforms when the liquidity pump is on, and it underperforms when the liquidity pump is off,” Melker, a senior macro strategist, told crypto trader Scott Melker.
Melker pointed out the stark reality that the liquidity pump is currently "way off," referencing the Fed fund futures which indicate interest rates hovering around 5% in the coming year. This suggests a bleak outlook for the revival of the liquidity pump.
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McGlone elaborated on his views via social media.
"Bitcoin might be akin to a teenager raised on a high-sugar/stimulant diet of extraordinarily low-interest rates and facing weaning," he said on X.
Bitcoin faces challenges, especially with the looming prospect of 5% US Treasury bills and deflating producer prices, he explained.
McGlone also cautions against the risks associated with the popular belief that assets that have seen an upward trajectory will continue to do so. See below:
'It Went Up, So Will Keep Going Up' Risks in Bitcoin -McGlone also drew a parallel between Bitcoin's performance and that of Amazon (NASDAQ: AMZN), noting that as of Aug. 28, Bitcoin's value was slightly below its end-of-2020 value, similar to Amazon's trajectory.The lessons of high-performing, widely hyped assets show price reversion may be the greater risk once the masses jump on board. #Bitcoin at about $26,000 on Aug. 28 is slightly below the end of 2020, similar to… pic.twitter.com/3UdAbpLNLe
— Mike McGlone (@mikemcglone11) August 28, 2023
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