Bloomberg Intelligence strategist Mike McGlone warns Bitcoin is behaving less like an independent hedge and more like a leveraged stock proxy, with its rally stalling below $80,000 while Fed rate-hike bets and an overheated S&P 500 open a path toward $10,000. A separate warning from the bond market adds near-term pressure: hot producer prices and Treasury yields near 5% are already weighing on the rally.
Bitcoin's rebound stalled at $76,746, unable to clear the $80,000 mark, and Bloomberg Intelligence senior macro strategist Mike McGlone says the failure reflects the asset's growing dependence on U.S. equities rather than an independent hedge.
Bitcoin's correlation with stocks deepens
McGlone points to three pressure factors behind the stall. One-year federal funds futures are now pricing in another 70 basis points of Fed rate hikes, draining liquidity from speculative markets. Separately, the S&P 500 has moved far above its 200-week moving average, raising the odds of institutional profit-taking. Over the past five years, Bitcoin's returns have merely matched the S&P 500's, while exposing investors to nearly three times as much volatility.
A $10,000 downside scenario
If the S&P 500 enters a correction and loses 20%, McGlone calculates Bitcoin would plunge toward its long-term fundamental pivot in the $10,000 area. Bitcoin can invalidate that scenario only by rising while stocks fall.
Bond market pressure builds separately
The bond market is sending its own warning. August producer prices rose 5.4% year-over-year, slightly above expectations. Brent crude also jumped past $100 this week as Middle East supply disruptions continue. The 10-year Treasury yield has climbed to just under 5%, while futures markets separately put the odds of a rate hike after the September 16 FOMC meeting above 70%. That combination helps explain why Bitcoin's rally from under $65,000 to $82,000 hit a wall in recent weeks.
For now, McGlone says, Bitcoin can invalidate the downside scenario only by rising while stocks fall — and macroeconomic indicators currently point in the opposite direction.
Sources: U.Today, CryptoPotato
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