Bloomberg strategist: Bitcoin might set tone for stock market

Bloomberg Intelligence strategist Mike McGlone has flipped the traditional market narrative, suggesting that the stock market may be dependent on Bitcoin (BTC), which is a reversal of the long-held belief that crypto follows equities.

Specifically, McGlone was discussing the current trends across different markets with The Wolf of All Streets’ Scott Melker, particularly the possibility that a capital rotation from gold and into Bitcoin was underway, in the podcast episode streamed on October 20.

As it happens, McGlone pointed out that the Bitcoin-to-gold ratio was hovering at around 25, a historically elevated level that highlights Bitcoin’s outperformance relative to the traditional store of value. Yet he warned that BTC could still drop toward $100,000 as part of a broader market recalibration.

Furthermore, he highlighted that Bitcoin “will only go higher with gold as long as the stock market goes up,” but also that:

“Everything’s fine for Bitcoin and cryptocurrencies as long as the stock market stays strong, stays elevated, and volatility stays very low. (…) Maybe the stock market is dependent on Bitcoin now.”

From risk asset to market barometer

Meanwhile, the world’s first crypto asset was at press time changing hands at the price of $107,935.35, recording an increase of 0.24% on the day, a 4.11% decline across the past week, and a dip of 4.26% over the last month, according to the most recent data.

For years, Bitcoin traded in lockstep with major indices, typically selling off when investors rotated into safer assets. However, in recent months, that relationship appears to be weakening as BTC has frequently led rallies across risk markets.

All things considered, McGlone’s comment suggests that instead of being a speculative tail, Bitcoin could increasingly act as the head of global market sentiment and a bellwether for liquidity and investor confidence. If this trend continues, BTC’s cycles could begin influencing risk appetite across equities, which would be the exact inverse of their historical relationship.

Watch the entire video below: