Bloomberg Intelligence senior macro strategist Mike McGlone has issued a stark warning that the cryptocurrency market bubble is "imploding," with Bitcoin potentially tumbling another 85% to $10,000. McGlone, a strategist with over three decades of market analysis experience, cites a changing narrative for crypto driven by surging stock markets with low volatility and the industry losing faith in former U.S. President Donald Trump's crypto boosterism.
McGlone notes that "the buy-the-dip-mantra since 2008 may be over." He points to gold and silver traders taking profits "at a velocity last matched about half a century ago" as a signal of more pain ahead for Bitcoin investors. His analysis connects cryptocurrency movements to broader financial conditions, highlighting that the U.S. stock market capitalization-to-GDP ratio (the "Buffett Indicator") is at its highest level in nearly a century, while the 180-day volatility for the S&P 500 and Nasdaq 100 sits at eight-year lows—conditions that historically precede significant corrections.
The warning comes amid a severe crypto industry downturn that has already wiped out $2 trillion in market value. Bitcoin's price has crashed nearly 30% in the past month and was down 2.2% over 24 hours to $68,717 at the time of reporting, with Ethereum down 4.4% to $1,971. Data from DefiLlama shows investors have dumped $678 million worth of Bitcoin exchange-traded funds (ETFs) so far in February, extending a $6 billion selloff since November.
McGlone presents Bitcoin as a potential recession signal, arguing its increased correlation with traditional risk assets and substantial institutional adoption means a major collapse could indicate broader economic weakness. He warns that if the U.S. stock market has peaked, Bitcoin's price could fall sharply to around $10,000.
Despite the dire prediction, other heavy hitters remain bullish. U.S. Treasury Secretary Scott Bessent stated that the passage of crypto legislation like the Clarity Act will shore up investor confidence and boost prices. Institutions such as BlackRock and Goldman Sachs continue to increase their exposure to Bitcoin and alternative cryptocurrencies like Ethereum.
Market jitters are also fueled by the "AI scare trade," with technology sector stocks—which Bitcoin often follows—being hammered by fears of disruption from artificial intelligence. BlackRock's flagship tech ETF is down 23% year-to-date.
