- A Bloomberg strategist warns Bitcoin could fall back to $10,000, despite market optimism for $150,000 highs.
- Bitcoin now shows a record correlation with the S&P 500, exposing it to equity market downturns.
- Gold has outperformed Bitcoin since December 6, highlighting BTC’s struggle as a “risk-on” asset.
- Expanding cryptocurrency supply may dilute Bitcoin’s scarcity advantage and add selling pressure.
Bitcoin Faces Bearish Warning: $10,000 Target in Play
While many in the crypto market anticipate Bitcoin (BTC) climbing toward $150,000, Bloomberg Intelligence senior commodity strategist Mike McGlone has issued a starkly bearish forecast. Speaking with David Lin on September 2, McGlone suggested that Bitcoin could “lose a zero” and potentially plunge to $10,000.
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“Bitcoin added a zero. I think it loses a zero now. Go back to $10,000,” McGlone explained, noting that such a move wouldn’t be unusual in Bitcoin’s history, though painful for investors currently holding the asset.
This warning comes as Bitcoin struggles to maintain the $110,000 support level, underscoring the ongoing volatility and uncertainty in the crypto market.
Bitcoin’s Risk Asset Status
According to McGlone, Bitcoin has evolved into a clear risk-on asset. Its 48-month correlation with the S&P 500 is now at record highs, compared to a negative correlation back in 2020. This shift means that when equities weaken, Bitcoin is more likely to follow, reducing its appeal as a safe-haven alternative.
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Interestingly, while gold has surged about 30% since December 6, Bitcoin has only gained around 8% in the same period. The Bloomberg Galaxy Crypto Index has been largely flat, suggesting that gold’s defensive qualities are outshining cryptocurrencies during times of market stress.
Volatility and Market Outlook
McGlone also pointed to the Volatility Index (VIX), which hit its lowest level of the year in August before rebounding sharply. He believes this reversal could mark a turning point for risk assets, with Bitcoin’s recent peak possibly coinciding with the bottom in volatility.
If volatility continues rising, Bitcoin may face increased downward pressure, aligning with McGlone’s $10,000 downside target.
Oversupply of Cryptocurrencies
Beyond macro risks, McGlone highlighted concerns about the sheer expansion of cryptocurrencies in circulation. While Bitcoin’s supply remains capped at 21 million coins, the existence of millions of altcoins and tokens could dilute Bitcoin’s scarcity narrative—a key driver of its long-term value proposition.
This oversupply, combined with risk sentiment shifts, could weigh heavily on Bitcoin’s ability to sustain its current price levels.
While some analysts see Bitcoin pushing toward $150,000, Mike McGlone’s bearish call for $10,000 serves as a cautionary counterpoint. With rising volatility, equity market risks, and increasing competition from altcoins, Bitcoin’s next move may be more unpredictable than bullish forecasts suggest.
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