Bitcoin Bear Market May Lead to Further Declines in Stocks and Gold

Bloomberg Industry Research senior commodity strategist Mike McGlone pointed out that the bear market in Bitcoin could provide guidance for gold and other risk assets. He believes that Trump's shift from a crypto opponent to a supporter could help him secure re-election in 2024, but Bitcoin has peaked and fallen back, with historical experience suggesting that other risk assets may decline accordingly. McGlone noted that Bitcoin's 50-week moving average indicates it is in a downward trend, and gold also faces the risk of falling. Currently, gold's volatility is about 2.2 times that of the S&P 500 Index's annualized volatility, the highest since 2007, making it a highly volatile and highly correlated asset. He believes that the Bitcoin bear market may signal a mean reversion in the volatility of the S&P 500 Index, aligning it closer to the typical 1:1 relationship with gold. McGlone concluded that risk assets currently face significant downside risk, with the midterm elections potentially being a decisive factor.

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