tl;dr
Bloomberg commodity strategist Mike McGlone warns of a potential massive correction in US markets that could sharply lower prices of Bitcoin, oil, stocks, copper, and bonds. He cites elevated S&P 500 to GDP and S&P 500 to gold ratios, historically associated with market crashes. McGlone predicts a p...
Bloomberg commodity strategist Mike McGlone issues a stark warning about a potential massive correction in the US markets that could drastically reduce prices across various asset classes including Bitcoin, oil, stocks, copper, and bonds. He highlights elevated stock market ratios, specifically the S&P 500 to GDP and S&P 500 to gold ratios, which historically coincide with major market crashes such as those in the 1930s, late 1990s, and 2008.
McGlone forecasts a severe market reversion with a potential 50% drop in the US stock market, crude oil prices falling to $40 per barrel, copper dropping to $3 per pound, and Bitcoin plunging to $10,000. He also anticipates 90% downturns in most cryptocurrencies. Interestingly, gold might stand out as an exception, with a projected climb to $4,000, due to its unique status and resistance to simple reversion trends.
At the core of McGlone’s warning is the impact of President Trump’s tariff war, which he suggests will trigger America’s “self-correcting mechanism.” This economic pushback could manifest as significant market dislocation and chaos, possibly influencing the next elections and reshaping the global economic order for decades to come.
While the predicted drops sound alarming, McGlone notes that such magnitude in downturns is “normal” when viewed through the lens of historical precedent. For context, Bitcoin was trading near $87,529 when these insights were shared, emphasizing the stark potential shift ahead.
McGlone’s outlook invites investors and market watchers to consider whether current valuations are sustainable or if history might repeat, ushering in a period of dramatic adjustment across multiple financial sectors.