Bitcoin's flat trend vs. S&P 500 signals risk warning, says Bloomberg analyst

Bitcoin's sideways trading compared to the S&P 500 may indicate a warning for speculative cryptocurrencies and the broader risk-asset market, according to Bloomberg senior commodity strategist Mike McGlone. McGlone noted that Bitcoin, once viewed as the leading risk asset, has shown about three times the volatility of the S&P 500 since 2021 but has recently remained rangebound against the index. He highlighted that the BTC to S&P 500 ratio is closely linked to expectations for Federal Reserve tightening, which have recently decreased. Additionally, McGlone pointed out that U.S. 30-year Treasury yields have increased this year while gold and Bitcoin have declined, suggesting a divergence that may favor U.S. Treasuries. Rising inflation is driving Treasury yields higher, while the declines in Bitcoin and gold could indicate stronger deflationary pressures.

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