• 24 June, 2024
News

Bitcoin Faces Potential Downturn Amidst ETF Hype – Analyst Warns

Amidst the buzz surrounding Bitcoin’s surge in the wake of an anticipated spot Bitcoin exchange-traded fund (ETF) approval, Bloomberg Intelligence’s senior macro strategist, Mike McGlone, makes a cautionary note. In a recent discussion with crypto influencer Scott Melker, McGlone expresses apprehension about a potential downturn for the leading cryptocurrency.

McGlone’s analysis centers on the historical tendency of risk assets, including Bitcoin, to face a downturn following significant rallies. He draws to past events like the fall of Lehman Brothers and the collapse of FTX, emphasizing the inherent risk associated with Bitcoin’s current market position.

“Risk assets have to go down. That’s what’s missing. And Bitcoin is one of the riskiest assets…,” McGlone states, underscoring the precarious nature of the current scenario.

Furthermore, McGlone points out similarities between Bitcoin’s current price behavior and patterns observed before previous market tops, suggesting a possible trend reversal. This perspective gains significance from the U.S. Securities and Exchange Commission (SEC) on spot market BTC ETF applications. On that note McGlone cautions.

This is the week. If they rug pull, that’s bad. If they launch, well, lessons have been those haven’t been good. And is there a lot of hype and bullishness? Yeah, just as much as I’ve seen it at other peaks.

As of the latest update, Bitcoin is trading at $45,205, reflecting a 2.5% increase in the last 24 hours. While the cryptocurrency has experienced a substantial rally, climbing 50% from $30,000 and tripling in value compared to the previous year, McGlone advises investors to exercise caution, urging them not to become overly optimistic in anticipation of a potential ETF approval.

Bitcoin, currently priced at $46,828.28 and is entering its second week of 2024. The United States is on the verge of making a historic decision that could shape Bitcoin’s future. The decision pertains to the approval of the country’s first-ever Bitcoin exchange-traded fund (ETF) which is expected to be made by January 10. This event has been highly anticipated and is considered a significant moment for the institutional adoption of Bitcoin. 

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