Bloomberg Strategist: Crypto Market Decline Could Be Start of "Deflation Domino Effect," Iran Situation May Trigger US Recession

Bloomberg Intelligence's senior commodity strategist Mike McGlone stated on platform X that the market is discussing whether the Iran situation could become the trigger for the next US economic recession. Currently, US stock valuations are at historical highs, while the 180-day volatility of the Nasdaq 100 Index is near its lowest point since 2018. If volatility significantly increases in the future, it could validate his judgment of a market turning point. The current decline in crypto assets may only be the beginning of the "deflation domino effect in the post-inflation era." The crypto market's previous gains were too large, supply has increased, and the price drop is, to some extent, a correction of the excessive rise.

Regarding oil, recent sharp price increases often flush out short positions, stimulate increased supply, and may trigger global economic recession risks. High volatility in precious metals and energy markets may gradually transmit to the stock market. He predicts that following Bitcoin in 2024 and gold in 2025, US Treasury bonds (T-bonds) may become the primary asset for excess returns in 2026. However, if in the future Bitcoin stabilizes above $74,000, copper prices rise to $6, silver reaches $100, the S&P 500 hits 7000 points, the Dow Jones rises to 50,000 points, and US bond yields exceed 5%, then his current judgment could be proven wrong.