Bitcoin is a 'wild card' set to outperform, says Bloomberg analyst

Bloomberg analyst Mike McGlone has labeled Bitcoin (BTC) a “wild card” which is “ripe” to outperform once traditional stocks finally bottom out. 

In a five-part Twitter thread on Sept. 7 to his 52,600 followers, McGlone explained that while the United States (U.S.) Federal Reserve tightening will likely determine the direction of the stock market, Bitcoin remains a “wildcard” that could buck the trend, stating:

“Bitcoin is a wild card that’s more ripe to outperform when stocks bottom, but transitioning to be more like gold and bonds.”

The commodities strategist dived into more detail in a Sept. 7 report, noting that Bitcoin was primed to rebound strongly from the bear market despite a “strong headwind” toward high-risk assets:

“It's typically a matter of time for the fed funds gauge to flip toward cuts, and when it does, Bitcoin is poised to be a primary beneficiary.”

McGlone added that while Bitcoin would follow a similar trend to treasury bonds and gold, Ethereum (ETH) “may have a higher correlation with stocks.”

The Federal Reserve’s increased quantitative tightening comes amid several major interest rate hikes throughout 2022, with the most recent spike accounting for a 75 basis points increase on Jul. 27.

Macro in Five Charts: Crude, Commodities, Stocks, Bonds, Bitcoin - #Crudeoil may be resuming an enduring bear market and refueling the T-bond bull. #FederalReserve tightening as global GDP turns negative may help transmogrify #stocks to going down on bad news and up on good. pic.twitter.com/KZEWsZyI8h

— Mike McGlone (@mikemcglone11) September 7, 2022

While it is not known exactly when the Fed's quantitative tightening will end, some economists predicted the endpoint will begin “at some point in 2023” according to a Bloomberg article published in August. 

Quantitative tightening is a contractionary monetary policy tool that is used by central banks to reduce the level of money supply and liquidity in an economy, which can reduce spending across markets, such as stocks. 

Related: Bitcoin likely to transition to a risk-off asset in H2 2022, says Bloomberg analyst

But despite McGlone’s bullish take, other experts believe that Bitcoin and equity markets have actually become more correlated than before.

Cointelegraph contributor Michaël van de Poppe recently said the correlation between the S&P 500 index and BTC was approaching 100%, while a number of IMF economists claimed to have seen a 10-fold increase in correlation between crypto and equity markets in some regions of the world.