Crypto Slump Could Be Far From Over, Barclays Analyst Warns

Another sell-off could be on the way for crypto after a leading strategist at Barclays warned that the recent U.S. stock market rally may not last.

There are more signs of trouble in the cryptocurrency market, with a leading strategist at Barclays warning that the recent rebound in U.S. stocks may not last.

Alexander Altmann, the global head of equities tactical strategies at Barclays, is now somewhat skeptical of the strength of the stock market rebound after the brutal sell-off that has also dragged cryptocurrencies lower.

He lists factors such as negative market breadth, mediocre growth stock performance, a modest rebound in neocloud stocks, the ongoing crypto slump, and a flat quality factor.

The concerns from Altmann come amid increasing worries that the AI investment frenzy that has been a key driver of U.S. equity market performance may not be sustainable.

Barclays strategist was one of the few Wall Street experts who questioned whether the U.S. midterm elections would bring lasting benefits to stocks.

Barclays has flagged the risk that investment strategies sensitive to volatility could help worsen the market decline.

According to Barclays models cited in Bloomberg’s report, volatility-control funds may be at risk of dumping as much as $135 billion of U.S. equity futures in the 24 to 48 hours following Thursday’s market mayhem.

On the Oct. 29 episode of Bloomberg’s Odd Lots podcast, Altmann also argued that investors are in a “denial phase” concerning the risks to the AI sector.

He pointed to growing financing pressure on neocloud companies that host computing resources for AI applications as a sign of early stress in the industry.