Bitcoin’s Surprising Outperformance Against S&P 500: Bloomberg Analyst Weighs In

Bloomberg analyst Mike McGlone claims Bitcoin is outperforming the S&P 500 in 2023, highlighting its success. However, he warns that potential recession could lead to a significant decline in stocks and possibly cryptocurrencies. While Bitcoin showed resilience, concerns about unlimited supply and volatility linger. Nonetheless, McGlone speculates Bitcoin could surpass gold if stocks fall further.

Bitcoin’s year-to-date performance has been notably impressive, outperforming the S&P 500, and Bloomberg analyst Mike McGlone is calling it a real achievement. He shared insights with his 68,800 followers on social media platform X, indicating that while Bitcoin (BTC) is surging ahead of stocks, the latter could face further significant declines if the economy tips into recession.

As of April 23, McGlone highlighted that Bitcoin’s recovery to unchanged levels represents a notable feat, especially since the S&P 500 has dropped nearly 10% within the same period. But he warns, don’t be fooled by what might look like the leading contender in a race; a downturn could still be ahead. There’s a strong possibility of about a 30% hit to US equities if a recession unfolds, he notes.

Delving deeper, McGlone suggested that the crypto market could mirror historical downturns, similar to the catastrophic stock market crashes of 1929 and 2000, as well as Japan’s market dip in 1989. He raised concerns over the nature of digital assets, which include boundless supply challenges, extreme volatility, and a speculative essence that might prove detrimental.

He further elaborated that cryptocurrencies in 2025 may resemble the stock market scenarios of past crashes. If this holds true, we could see a situation where trends favour traditional safe havens like gold and US Treasury bonds amidst potential deflationary times. He added that the crypto market being roughly stagnant versus beta over the last seven years highlights these burdens.

Nonetheless, McGlone concludes with a somewhat optimistic view: if traditional stock values continue to fall, Bitcoin could very well outperform gold. Currently, both Bitcoin and gold boast a significant increase of around 42% since April 23 over the past year, contrasted with the almost 10% gain of the S&P 500. This raises a pertinent question: over the next twelve months, can Bitcoin truly outpace gold if stocks continue their downward trend?

As of now, Bitcoin is trading at $93,228, showing a minor increase of 1% over the last day. Investors are advised to handle such investments cautiously and conduct thorough research before committing to cryptocurrencies or other digital assets.