Here's why Bitcoin, gold, and bonds might dominate the rest of 2022 - Mike McGlone

So far 2022 hasn’t been kind to stocks and crypto with losses all across the board. Bitcoin lost 37%, of its value despite hitting an all-time high six months ago. Similarly, the S&P 500 dropped about 17%, since the start of the year. 

However, some analysts would declare that not everything will continue falling for the rest of the year. Senior commodity strategist at Bloomberg Intelligence, Mike McGlone shared his latest insights on Twitter:  

“If Stocks Are Going Limp, Bitcoin, Gold and Bonds Could Rule 2H — The propensity for Bitcoin to outperform most risk assets and gold most commodities, may play out in 2H, particularly if the stock market keeps succumbing to FederalReserve jawboning.”

Overall, market watchers are divided whether the Federal Reserve (Fed) will do too much too fast and if the stocks have already priced in everything that fast and large rate hikes can cause to stock prices.

The Nasdaq index is down 28%, year-to-date (YTD) with most tech stocks negatively affected by rising rates. 

For the Fed to rein in inflation, more rate hikes will probably have to be performed, which in turn will mean more volatility for the stock market in the short-term as McGlone also points out. 

The two other major classes have a varied response to rising rates. Crypto has fallen this year despite it being promoted as a cure to all ills that can befall the market like rising interest rates, inflation, and lack of purchasing power. 

Bitcoin’s descent began in November when the Fed initially announced that rates would be raised and market participants understood that liquidity might become an issue

However, analysts believe that higher institutional and retail active traders’ adoption will lead to crypto ending the year on a positive note. 

Commodities, on the other hand, have had a solid year with some reaching all-time highs such as oil, wheat, and nickel. 

Some of these increases can be tied to Russia’s unprovoked invasion of Ukraine as fears of supply disruption and bans on Russian export took hold of the markets. 

As geopolitical tensions continue, prices will likely remain elevated until the conflict is resolved and some normalcy is seen in the European markets. 

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