Bloomberg Intelligence’s senior macro strategist, Mike McGlone, has given his latest insight into the state of Bitcoin after a tumultuous weekend for the leading cryptocurrency. McGlone believes that Bitcoin could lead declines for risk assets, a sign that the influence of cryptocurrency is now contagious.
McGlone highlighted that if the current slowdown in the price of risk assets is far from over, Bitcoin has the potential to lead a volatile asset class lower. The expert’s commentary comes at a time when the Bitcoin network is experiencing unusual congestion, fueled by the hoard of Ordinals that have made their way to the protocol.
Bitcoin Could Pace Declines for Risk Assets –
If the worst isn’t over for risk assets, #Bitcoin may lead the way lower. pic.twitter.com/UlEVjCEKwr— Mike McGlone (@mikemcglone11) May 8, 2023
This congestion has caused problems for some trading platforms, with Binance temporarily halting some transactions. However, the sensitivity in the security of the Bitcoin network has reignited sentiment about the potential success of smart contracts on the blockchain. RSK Infrastructure Framework and other protocols are championing this new narrative.
Despite Bitcoin’s growth of around 70% this year, McGlone suggests that this may be due to systemic bounces in a broader bear market. Bitcoin had a very erratic and volatile weekend, with the price currently at $27,849, down 3.9% over the past 24 hours. Sentiment surrounding Bitcoin has dampened, as network congestion typically pushes traders to steer clear of the protocol.
However, Bitcoin’s resilience has made it stronger than most risk assets, and more traders are keeping an eye on it as anticipation for the congestion clearing off mounts. The crypto ecosystem has recorded an impressive growth trend since the start of the year compared to the mainstream tech sector, and Bitcoin’s influence continues to expand.
As the Bitcoin network navigates this congestion, it remains to be seen what the future holds for the digital currency. However, it is clear that its influence is now contagious and will likely impact the broader market.
Read more:
- Binance Records Largest Ever Bitcoin Outflow: Over 162,000 BTC Worth $4.6 Billion Leaves Exchange
- Binance Halts Bitcoin Withdrawals Due To Network Congestion
- Bitcoin Scalability Issues Highlighted As Binance Halts Withdrawals For Second Time In 12 Hours