Mike McGlone sees parallels to 2008 crisis — 'Gold has lost its store of value status'
Bloomberg Intelligence's Mike McGlone sees echoes of 2008 in today's markets. He discusses oil market turbulence, Bitcoin as a forward-looking indicator, and escalating volatility across asset classes.
With the ongoing Iran-related conflict continuing to unfold and worldwide energy supplies facing the threat of extended interruption, the majority of financial assets will probably exhibit risk asset characteristics, says Mike McGlone, a strategist at Bloomberg Intelligence, in his latest conversation with Cointelegraph.
While commodity markets have experienced significant price fluctuations, equity market volatility has stayed comparatively subdued, creating what McGlone views as an untenable divergence. Throughout history, these types of disconnects typically get resolved through heightened volatility in stock markets — frequently coinciding with more extensive market downturns.
This peculiar volatility pattern is emerging in the gold market as well, an asset class historically regarded as a safe-haven investment.
Right now, 180-day volatility on gold is almost 2.5 times that of the S&P 500. So it's no longer a store of value.
Mike McGlone
During the conversation, McGlone further explores the reasons why Bitcoin (BTC) along with the wider cryptocurrency sector might be functioning as a forward-looking indicator for worldwide risk assets. Given that the Bloomberg Galaxy Crypto Index has already declined substantially from its all-time high, he contends that digital assets may be foreshadowing a possible decline in conventional financial markets.
The overarching macroeconomic environment, according to his analysis, bears growing similarities to previous episodes of financial strain, particularly the period leading into the 2008 financial crisis, during which energy costs surged before experiencing a sharp reversal amid a worldwide economic contraction.
McGlone further provides his perspective on crude oil valuations, interest rate trajectories, and the function of US Treasuries, which he continues to regard as among the limited assets that stand to gain should volatility increase and economic expansion decelerate.
Is it possible that the present oil price shock could catalyze a more comprehensive market correction? And what are the implications for Bitcoin, equities, and the worldwide economy?
Watch the complete interview with Mike McGlone to get his comprehensive macro perspective and market forecasts.
This interview has been edited and condensed for clarity.