A Bloomberg analyst thinks Bitcoin will rise for the rest of this year. What are his arguments?
October has been Bitcoin’s best month for profitability since 2014, averaging 20 per cent for the aforementioned month. Bloomberg chief analyst Mike McGlone said in a recent report that BTC may well have bottomed out this summer, with its value dropping as low as $17,000. Which means that by the end of this year we can expect at least a local bull run on the cryptocurrency’s chart, the expert believes. Let’s talk about his point of view in more detail.
When will cryptocurrency go up?
Many central banks around the world have been actively raising interest rates for the past few months to combat the looming macroeconomic crisis. This is having a negative impact on traditional assets, but cryptocurrencies have so far fared better during this difficult period. This is the subject of the following quote from the report.
When the macro situation changes, we will see Bitcoin, Etherium and Bloomberg Galaxy Crypto Index once again outperform most traditional assets in terms of profitability.
Bitcoin’s volatility against the Bloomberg Commodity Index
McGlone notes that Bitcoin’s volatility against the Bloomberg Commodity Index has now fallen to an all-time low. As a reminder, this index tracks the price movements of global commodities like gold and oil. Normally, the fall in the price of BTC against the index is true for the period of formation of the bottom of its exchange rate.
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In the second half of 2022, an analyst expects the risk of investing in Bitcoin to decline significantly. This means that the cryptocurrency will be seen more often as a profitable investment during the current crisis. Still, while most traditional assets are losing value, BTC is still relatively stable, hovering around the $20,000 mark.
Cryptocurrency exchange rates as of today
By the way, Bitcoin’s price correlation with gold has been growing noticeably lately – the precious metal is traditionally considered an excellent investment at a time of macroeconomic instability.
Bitcoin’s correlation to gold
While some are still contemplating investing in the cryptocurrency, for others it has become a new career landmark. One such person is Lewis Neal, a former quarterback in the National Football League (NFL). In an exclusive interview with Cointelegraph, he shared his story of high expectations for American football and the events that saw him end his career as an athlete and then become the CEO of cryptocurrency wallet Kryptic. Here’s his line.
I thought I was going to get a lot of playing time. But I was a reserve that year. So I had to develop another skill that could be life-changing for my family and myself. That’s what prompted me to get into the finance industry.
Former NFL footballer Lewis Neal
After retiring from football, Neal became a trader. He first traded currencies and futures until he came to cryptocurrency trading. He eventually became the head of the Kryptic cryptocurrency wallet project and is now actively using his forex trading experience in crypto. Incidentally, with him in mind, Neil is confident that the rapid rise in the Dollar Index (DXY) could lead to another collapse in the Bitcoin chart. He continues.
Eventually the market will follow the economy, even if it is Bitcoin. So just because Bitcoin is stable doesn’t mean it can’t fall, right? Because if you look at the dollar, it is strengthening against all major currencies.
The rise of DXY
The DXY does continue to conquer new peaks, which in one way or another has a negative impact on the Bitcoin chart. However, the index can also be used as a good indicator for a new bull run - a reversal of its trend will signal a potential rise in BTC.
And now let’s move on to the results of the third quarter of 2022, which ended the day before. The DappRadar analyst platform’s report on the state of the crypto industry over the period shows that the market is showing signs of recovery from its ongoing bearish trend. According to analysts, a number of factors have played a role in this – in particular, Etherium’s transition to the new Proof-of-Stake (PoS) consensus algorithm. In addition, there has been a slight increase in market capitalisation, although the figure is still in the trillion-dollar range.
What will happen to cryptocurrencies?
According to Cointelegraph sources, in the third quarter of 2022, cryptocurrency market capitalisation increased by 8.5 per cent, that is between July and September. A small increase was also seen in the volume of blockchain funds in decentralised protocols, at 2.9 per cent.
Crypto market capitalisation
DappRadar also notes a 12 percent increase in the number of unique active cryptocurrency wallets to 1.8 million units compared to the previous quarter of the year. The blockchain gaming sector contributed significantly to this trend, with the number of unique wallets increasing by 8 percent from August to September.
Growth in the number of unique cryptocurrency wallets in various areas
The ImmutableX platform showed a more impressive performance, with a 30 per cent increase in unique customer crypto-addresses over the same time period. At the same time, the platform also saw an increase in the number of unique token transactions. Across the entire NFT space, statistics show an increase of around 11 per cent in the number of transactions. The dominant position as an NFT platform is still held by Etherium, with Solana coming in second.
Cryptocurrency theft was also mentioned in the report, with blockchain bridges receiving the most attention, as they are a priority target for hackers. DappRadar analysts cited the $190 million hack of the Nomad platform as one of the most notable events this quarter. In total, attackers managed to steal $461 million through hacking attacks over the period mentioned in the report.
Recall that the blockchain bridge was even used as a vulnerability in today's BNB Chain hack. The hacker was tentatively able to get just over $100 million, although he ended up aiming for $600 million.
Biggest cryptocurrency hacks in the third quarter of this year
In addition, experts highlighted the impact of macroeconomic factors on the crypto market. Central banks are trying to regulate inflation by raising lending rates, which has a negative impact on crypto. Here is the analysts’ point of view on the issue.
Current macroeconomic conditions have a significant impact on the crypto market, making it impossible to predict the worldwide spread of cryptocurrencies without a noticeable recovery in traditional markets.
The volume of blockchain funds in DeFi
However, the third quarter of 2022 was not only memorable in terms of negative news in terms of fundamentals. For example, the US government recently published guidelines for the regulatory infrastructure around the crypto market. While not every investor in digital assets likes them, it is an important step towards legitimising crypto.
We believe that the cryptocurrency niche has indeed weathered the current crisis in the global economy relatively well, given the behaviour of equities and other assets. However, it is at least short-sighted to expect growth only because of this fact: After all, the digital asset industry does not only behave "logically". In addition McGlone was already betting on Bitcoin at $100,000 by the end of 2022, which we're unlikely to see in that timeframe.
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