- Bloomberg analyst Mike McGlone predicts gold will outperform Bitcoin in 2024 due to macroeconomic factors like interest rates and recession.
- McGlone expects the Fed will not cut interest rates as much as in the past due to high inflation, and believes the US will enter a recession in 2023.
- In a recession environment, McGlone forecasts Bitcoin will underperform stocks, while gold and long-term bonds will outperform as safe haven assets.
Senior commodity strategist Mike McGlone believes Bitcoin is likely to underperform the stock market on a risk-adjusted basis in 2024, while gold may come out ahead. Despite bullish narratives around the recent spot Bitcoin exchange-traded fund (ETF) approval and the upcoming Bitcoin halving, macroeconomic factors may prevent the largest cryptocurrency from reaching new all-time highs in 2024.
Interest Rates and Recession
In particular, McGlone believes market expectations that the Fed will cut interest rates, which usually boosts risk-on assets like Bitcoin, are largely misplaced. The Fed will not ease with the ease it has in the past because of inflation it created with easing too much, he pointed out.
McGlone expects the US economy to finally enter a recession this year, which should drive the stock market down. As a leading indicator for risk assets, Bitcoin is likely to suffer in such an environment. “When the stock market and beta goes down, Bitcoin goes down more,” McGlone said.
Gold and Bonds Outperform
According to the analyst, gold and long Treasury bonds will likely be the assets that will come out ahead in this recession environment.
Conclusion
Macroeconomic factors like interest rates and recession could prevent Bitcoin from reaching new highs in 2024, while gold is poised to outperform. Despite optimistic narratives, Bitcoin may underperform stocks and gold if McGlone’s forecast proves accurate.
