Mike McGlone says Bitcoin will prevail in 2022, but compares Dogecoin and SHIBA INU with the likes of AOL and Pets.com.
Bitcoin has managed to hit $38,000 as the crypto markets continue their recovery for a second day.
At the time of writing, BTC has risen by 4.77% over the past 24 hours.
Unsurprisingly, Ether and Binance Coin are outperforming — up 8.52% and 6.13% respectively.
Both cryptocurrencies had suffered outsized losses during a spate of sell-offs earlier this week.
All of this comes as global assets continue to endure heightened levels of volatility, with cryptocurrencies and equities currently witnessing an exceedingly close correlation.
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Awaiting the Fed
On Wednesday, markets in Europe rallied ahead of the Federal Reserve's meeting later today, where economists are expected to indicate that interest rates will begin to rise in March.
The short-term direction of BTC could be dictated by where Wall Street heads next — and to add to the confusion, analysts are pretty divided on what the coming weeks have in store.
While Goldman Sachs believes that the bull market should continue, with economies continuing to grow as lockdowns end following the coronavirus pandemic, Barclays believes that further sell-offs lie ahead.
We're expecting to receive a statement from the Federal Open Markets Committee at 2pm EST, followed by a press conference from chairman Jerome Powell about half an hour later.
Some crypto watchers believe that the uncertainty surrounding planned interest rate hikes could amount to a "sell the news, buy the rumor" event — and prices will heal further once investors actually know what to expect.
Bloomberg Intelligence's Mike McGlone — who continues to maintain an upbeat tone on BTC — believes Bitcoin will prevail in the coming 12 months, but warns that smaller altcoins could face aggressive sell-offs similar to the internet purge in 2000-01. McGlone went on to compare Dogecoin and SHIBA INU with the likes of AOL and Pets.com.
Looking ahead, $30,000 is regarded as key support for Bitcoin — and indeed, BTC did manage to bounce off $33,000 on Monday.
In his latest report, McGlone noted that there are now about 17,000 cryptocurrencies on CoinMarketCap, compared with just 8,000 at the start of 2021. He went on to contrast Bitcoin's limited supply with the seemingly endless number of rival digital assets, writing:
"Basic economics doesn't favor broad price appreciation when supply is growing that rapidly, and we see the 2021 pumps (looking at you Dogecoin and Shiba Inu) indicating market excesses ripe for purging."
