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Global markets began the new week with a drop in Bitcoin prices, volatility in gold prices, and strategic changes in US Treasury bonds.
Leading figures in the industry, including CEO Dave Weisberger, Strategist James Lavish, and Bloomberg Senior Strategist Mike McGlone, discussed the current state of the markets and future risks.
CoinRoutes CEO Dave Weisberger offered a different perspective on the debate surrounding whether the recent Bitcoin price fluctuations were a “bear trap” or a “dead cat bounce.” Weisberger stated that last week’s sharp decline was largely due to “forced selling” by institutional investors under pressure to manage risk before the weekend.
Weisberger dismissed claims that “paper Bitcoin” (ETFs and futures) circulating in the market was suppressing the price as “complete nonsense.” Arguing that the Bitcoin market still has a liquid spot market, the CEO stated that the market has been delegitimized and that such “clean-ups” are often part of bottom formations.
Bloomberg Senior Commodities Strategist Mike McGlone maintained his pessimistic stance on the cryptocurrency market. McGlone argued that the euphoria in the crypto world is similar to the historical “tulip mania” and that we are currently in a “bear market”.
According to McGlone, the real big macro opportunity lies in Treasury bonds. Expecting a decline in US 10-year Treasury yields, the strategist stated, “The biggest macro trade this year will be in long-term bonds.” He also noted that gold is overvalued and reminded that downside risks persist in commodities such as silver and copper.
CIO and Macro Strategist James Lavish stated that a potential agreement between the US Treasury and the Fed (Treasury-Fed Agreement) would be critically important for the markets.
Lavish, noting that China’s divestment of US Treasury bonds is a serious development, said, “The entire market is driven by debt and bonds. That’s the fundamental driving force behind everything.” Lavish also pointed out that spot Bitcoin ETFs are essentially required to hold physical Bitcoin, but Bitcoin moves in tandem with technology stocks (NASDAQ) when overall risk appetite in the market decreases.
One of the rare points of agreement among the three speakers was the future of stablecoins. Mike McGlone predicted that Tether’s (USDT) market capitalization could soon surpass Ethereum’s, while Dave Weisberger and James Lavish stated that regulation of stablecoins is inevitable to accelerate the financial system, but banks are unwilling to lose their share of the profits in this area.
*This is not investment advice.