Iran Conflict Recalls "Ghost" of 2008: Securities, Crypto Face Risks

Mike McGlone, senior macro strategist at Bloomberg, states that escalating tensions between the US–Israel and Iran could trigger a significant downturn in both the stock and cryptocurrency markets.

Senior Macro Strategist at Bloomberg, Mike McGlone. According to McGlone, in a negative scenario, the US stock market could plummet by up to 50%, with a wave of weakness spreading to the crypto market.

He also warns that the risk of closing the Strait of Hormuz is destabilizing the global economic order, causing commodity prices to surge and creating high volatility in oil, energy, natural gas, and precious metals markets—thereby exerting downward pressure on the stock market.

Similar Crisis Warning as 2008

McGlone warns that escalating conflict could act as a catalyst for a market downturn resembling the 2008 global financial crisis. He notes that extreme fluctuations in oil and gold prices are not limited to commodities but could also spread, putting pressure on US equities.

In this context, he recommends traders employing tactical strategies to take advantage of periods when markets are mispriced for buying or selling. He believes increased volatility will not only carry risks but also open up significant trading opportunities.

Supporting this view, McGlone points out that Bitcoin and silver have both experienced sharp rallies before quickly correcting downward. He also notes that the current rally in crude oil is approaching peaks seen in 2022 and 2008.

Overall, McGlone suggests that this year’s market bears many similarities to 2008—a period of sharp declines—but also offers substantial opportunities for agile traders, especially in commodities.

Negative Outlook for Bitcoin

McGlone remains firm in his view that Bitcoin could fall back to around $10,000, considering this a long-term average after the speculative growth phase has been eliminated. He states, “We’ve gone through the biggest money-printing spree in history, which pushed all risky assets higher. Crypto led the rally—and now it’s leading the decline.”

Currently, commodity markets are mixed: gold has decreased by about 0.3% to $5,005.37 per ounce, while silver has risen slightly by 0.25% to $80.78 per ounce. In energy markets, WTI crude oil has plunged 2.50% to $96.27 per barrel. Conversely, Bitcoin is trading around $74,214.55, up 4.4% in the past 24 hours.

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