Bloomberg Strategist Sees Bitcoin Bear Signals, Warns Crypto Bust Could Push BTC to $10K

Bitcoin slid into “bear territory” as a Bloomberg Intelligence strategist argued that rising volatility and a closer correlation with equities are eroding bitcoin’s diversification appeal. In an April 12 analysis, Mike McGlone focused on BlackRock’s iShares Bitcoin Trust ETF (IBIT) and its performance since launch, highlighting concerns about weakening risk-adjusted returns as crypto markets become more integrated with broader financial conditions.

ETF performance and the diversification debate

McGlone said on X that the crypto bear market could be in its early stages, using ETF performance since spot bitcoin exchange-traded funds began trading in January 2024 as a reference point. He noted that a chart comparing IBIT with the State Street SPDR S&P 500 ETF Trust (SPY) shows bitcoin exposure has not produced sufficiently strong risk-adjusted returns despite increased institutional access.

While he emphasized the risk-adjustment issue, the article also cited 2026 data indicating that IBIT has returned about +54% since launch, compared with the S&P 500’s +42% gain. The strategist’s broader point was that absolute performance has remained competitive even as volatility stays elevated.

Volatility and equity correlation rise

McGlone argued that the combination of higher volatility and a tighter link to equities reduces bitcoin’s value as a hedge. He said: “What’s notable is roughly the same bitcoin-to-beta total return came with about 4x the volatility, and the 200-day correlation near 0.5. High volatility and correlation, absent superior returns, typically top the list of things to avoid in proper diversification.”

In his view, bitcoin-linked exposure is behaving more like a high-beta risk asset than a traditional hedge, particularly during periods of macro uncertainty.

Valuation reset risks amid liquidity shifts

McGlone reiterated a long-standing $10,000 bitcoin projection based on a mean reversion framework. He described the post-2020 surge as a liquidity-driven anomaly, with the pre-pandemic range serving as a reference point supported by futures-era pricing trends. He also pointed to what he called a “lop off a zero” reset from prior six-figure expectations and cited dilution from millions of competing tokens, comparing the setup to the dot-com unwind.

As correlation with equities rises, he suggested capital could shift toward gold and U.S. Treasuries, particularly in a deflationary cycle where traditional safe havens tend to outperform. The article framed this as part of the case for a broader valuation reset under tightening financial conditions.

Support factors: supply and institutional holdings

Despite the bearish outlook, the article said bitcoin remains well above previously identified breakdown levels. It cited reduced post-halving supply of 450 BTC per day, exchange reserves near a 10-year low of 2.1 million coins, and more than $54 billion held within IBIT as indicators of stronger structural demand than in earlier cycles.

Strategist conclusion: “crypto bust” could be early

McGlone maintained a bearish stance, concluding: “My bias is the crypto bust may be just beginning. There was one in 2009 — Bitcoin — and now there are millions, most tracking little of substance yet still valued in the billions. Bitcoin may revisit $10,000, especially if beta declines.”

The article linked his view to concerns about excess token supply, fragile valuations, and tightening liquidity. It also noted that while institutional infrastructure continues to expand, the cited metrics suggest the asset class remains vulnerable to broader market cycles and changes in investor risk tolerance.