The narrative that Bitcoin should have increased in value in reaction to Russia’s invasion of Ukraine is one that many in the crypto space anticipated, but the reverse has occurred on February 24, with the market suffering an enormous selloff.
Speaking with Scott Melker, the host of Wolf of all Streets podcast, Bloomberg senior commodity strategist Mike McGlone highlighted that the markets are way overdue for a pretty significant correction, most notably in terms of equities, but this has also been felt in the crypto market as well.
Notably, McGlone thinks that this is a ‘defining moment’ for the digital asset; although there are downside risks, he believes that this is a “very good buying opportunity” for long-term investors who had left funds on the side.
The commodity strategist noted: “The key thing to point out here is cryptos and Bitcoin are still risk assets and they’re giving up back a lot of gains. I still think there is more pain there. I don’t think Bitcoin gets much below $30,000 its holding good resistance around $40,000. I think this is ultimately going to be a very good buying opportunity for Bitcoin for longer-term traders. It’s going to be looked back upon in history as a defining moment.”
As a result of Russia’s invasion of Ukraine, the price of gold climbed to a 13-month high on February 24.
Mr. McGlone stated: “Gold is way overdue for an enduring breakout above $2,000 an ounce, we’ve been calling for this for too long, unfortunately, this is how it works, markets take you down to the mat, make you not believe, and then it breaks out, so it’s way overdue.”
Generally, gold is viewed as a safe-haven asset amid rising geopolitical tensions, and its price has climbed accordingly. With tensions between the two nations continuing to escalate, investments in gold have also increased. Almost $1 trillion was infused into gold in the last 30 days alone.
US Global Investors CEO Frank Holmes believes that gold is the best asset to acquire in the high tension environment.
“When you look at gold, its breadth and depth of historical significance as a wonderful asset is really showing up when you have war,” he said.
Crude oil to peak at $100 a barrel
Elsewhere, despite the increasing value of Energy ETFs and oil hitting $100 a barrel, the senior commodity strategist believes that crude oil has probably peaked at around $100 a barrel; he compared the peak in oil prices in 2008 when oil was $145 a barrel.
“The juxtaposition between what’s happening now versus 2008 is shocking. For instance, there’s a property crisis in China and they are now the world’s largest importer of crude oil that was exactly what the U.S was in 2008 and now we’re a net exporter of crude oil.”
The market analyst sees the beginning of a forthcoming recession and a pretty significant equity market correction in the future.
“I think it’s a great buying opportunity for long bonds, gold, and Bitcoin. It’s just a question of time, you’ve got to get through that.”
At the time of publication, the S&P 500 is down 0.62% on the day, while Bitcoin is down 5.88% in the last 24 hours, currently trading at $36,233, recovering from as low as $34,472 earlier in the day.