Bloomberg commodity strategist Mike McGlone thinks crypto will return to outperforming traditional assets next year.
In a new analysis, McGlone notes that the value of the crypto market was slashed by $1.3 trillion in 2022, as of early December, a “roughly equivalent” figure to the combined market cap decrease of Amazon and Google.
The strategist says this signifies that crypto is still in its early stages.
“The most aggressive Fed tightening in 40 years is a good reason for the macroeconomic ebbing tide, but 2023 may be about which assets come out ahead as central banks pivot. If they don’t flip to easing, the world may tilt more deeply into recession, with repercussions for all risk assets. Our base case is for an elongated deflationary period, with the crypto market, as measured by the Bloomberg Galaxy Crypto Index, coming out ahead.”
McGlone says the dominance of stablecoins among the five biggest digital assets by volume actually demonstrates the value of Ethereum (ETH). He notes Ethereum’s tech makes it possible to trade digital dollars quickly and inexpensively.
“Our bias is that there’s little in the long term to stop this advancing technology from doing similar to what the futures and exchange-traded-funds markets did. Non-fungible tokens and decentralized exchanges are additional advances made possible by Ethereum.”
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