What if Bitcoin’s next big move is to literally lose a zero? A senior Bloomberg strategist warns the run to $100,000 may have marked the “peak of the bubble,” setting up a slide to $10,000—and his reasoning hinges on one powerful force traders often underestimate: macro correlation.

What’s happening

In a new interview, Bloomberg Intelligence senior commodity strategist Mike McGlone argues Bitcoin has morphed into a risk asset tightly linked to the S&P 500, with correlations near record highs. His view: if U.S. equities can’t stay elevated, Bitcoin’s upside stalls—and downside risk grows. McGlone also points to the proliferation of tokens (tens of thousands today versus effectively one in 2009) as a structural headwind fragmenting liquidity and attention. Counterpoint to risk: he expects gold to outperform, potentially advancing toward $4,000, especially if stocks roll over. He believes Q4 2025 could be unfriendly to stocks, risk assets, and BTC.

Why this matters to traders

When BTC’s equity correlation rises, crypto behaves more like high beta tech—sensitive to earnings, liquidity, and rate expectations. That compresses diversification benefits and elevates drawdown risk if equities wobble. It also suggests flows into “crypto beta” might fragment across many tokens, weakening dominant narratives. On the flip side, a strong bid in gold can flag risk-off sentiment and tightening financial conditions—historically a headwind for leveraged crypto exposure.

Key signals to monitor

• BTC–S&P 500 correlation (30–90 day): Rising correlation = higher equity-driven risk for BTC.
• S&P 500 vs. 200-day MA: Breakdown often pressures risk assets; reclaim supports risk-on.
• U.S. real yields & DXY: Higher real yields/stronger dollar tend to weigh on crypto.
• BTC dominance: Falling dominance in risk-off can indicate liquidity slippage into illiquid alts.
• Spot BTC ETF flows: Persistent outflows can foreshadow sustained weakness.
• Funding rates & basis: Elevated leverage into macro stress = liquidation risk.
• Gold trend: Breakouts alongside equity weakness support the risk-off case.

Actionable game plan

• Align crypto risk with macro triggers: If correlation is elevated and SPX loses its 200-DMA, consider reducing leverage, tightening stops, or hedging.
• Define invalidation: Pre-set levels where your thesis is wrong (e.g., index breakdowns, ETF outflows, rising real yields).
• Stagger entries: Use laddered bids on spot and avoid “all-in” sizing when volatility and correlation are high.
• Hedge intelligently: Index puts, BTC options, or partial rotations to cash/short-duration treasuries can cushion drawdowns.
• Watch liquidity: Track stablecoin net issuance and order book depth; thinning liquidity magnifies moves.
• Respect seasonality: If you expect turbulence into Q4 2025, shorten holding periods and favor mean-reversion or volatility strategies.

The bottom line

Whether or not Bitcoin “loses a zero,” the core message is clear: in a high-correlation regime, BTC’s fate is tethered to equities and liquidity. Trade the market you have—not the one you want—by anchoring your crypto plan to macro signals, defining risk, and staying nimble as conditions evolve.

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