 I look at Bitcoin as becoming more and more a leveraged version of Treasury bonds and goals, some form of combination of that. This year, central banks' tight and monetary policy caused a massive crash in crypto and other risk-on assets, but macro factors are already shifting and in the second half of 2022 we may see a completely different scenario. I think we're heading to one of the greatest reversions in history in terms of risk assets. In this interview, we talked to Mike McGlone, senior commodity strategist at Bloomberg to understand what macro factors will impact the second half of 2022 and also why we should prepare for one of the greatest bull markets in the history of Bitcoin. Before we start, don't forget to subscribe to our channel if you haven't done it already. I'm Giovanni, your host, and this is a Cointelegraph interview. So I wanted to discuss with you the outlook for the Bitcoin market in the second half of 2022. You said that the risks-verses-rewards ratio are tilted towards one of the greatest bull markets in history. So can you explain what you mean exactly by that? A resumption of, that's the key thing to remember, is Bitcoin has been by definition probably one of the greatest bull markets in history and it's just backed up at the highest velocity to the greatest discount ever versus it's 100-week, 50-week, 200-week moving averages. So it's pretty well discounted. What I see it's doing now is it's probably building a base around 20,000 similarity when it did around 5,000 at the end, at the bottom in 2018 and 2019. The key thing we have to think about is why is Bitcoin down? Now the whole market's corrected a lot. It really gets really speculative expensive with all cryptos. And it's correcting now because the whole tide's going out. And we've had one of the biggest corrections in the stock and bond market in my career. And I've been in the pits since the 80s, I've been in the business since the 80s. So the whole tide went out, Bitcoin and cryptos went down with the market. And now it's the question of which comes out ahead. And I see Bitcoin coming out ahead because I see it transitioning to be more of a risk-off asset like bonds and gold and less of a risk-on asset like the stock market. Looking at the second half of 2022, you see a higher probability that this greatest bull market in history will resume than a prolonged bear market until the end of the year. Yeah, well, so if Bitcoin does what it normally does, it's going to recover from these levels. It's just a question of time. Now if the Fed keeps hiking at the highest velocity, the greatest pace since, it's basically since 1980, yeah, that's a sledgehammer for all risk assets. But I think in most scenarios, Bitcoin will do better. So let's look at the best case scenario, say everything recovers, the stock bear market's over and starts to trickle higher. And that environment cryptos and most normally Bitcoin, most normally cryptos like the Bloomberg Galaxy Crypto Index will outperform most assets and continue to do that. That's what it has been doing. The other scenario, which I think is more likely, the stock market continues to go down, we head to this pretty severe extreme global recession. And we end up with bond yields declining and gold rallying. And I think Bitcoin will probably go towards that path because basically what's happening this year is people are recognizing that Bitcoin is one of the most significant leading indicators ever. Trace 24-7, it's no one's project or liability and there's no central exchange controlling it, trades on weekends. And by Monday morning, you get a sense of what's going to be happening in the world with markets by Bitcoin. It's never really happened that way before, but it's been showing us risk off. Now I think it's transitioning the other way. So that's where Bitcoin is becoming clearly unique. I sense what's happening is there's bids below the market in Bitcoin and offers above in the stock market. But I think we're heading to one of the greatest reversions in history in terms of risk assets. 2022 might be similar to 1929. We see the global markets, the world heading towards pretty severe recession. And most central banks led by the Fed are still tightening. That's pretty bad. So when you mentioned this great reversal that you are waiting for, what would be the main trigger that could mark the beginning of this reversal? So the great reversal of 2022 is something I've been speaking about since December of last year because it's don't fight the Fed. The Fed is being aggressive. And they have been much more aggressive than most people anticipated. Just the 40 days between the June hike and the July hike was the highest, 150 base points. That's the highest pace of hiking since the Volcker in early 1980s. So that's the great reversion I'm speaking to. And we've had a pretty substantial correction in the stock market. We basically wiped out $25 trillion from global equities. Crypto's wiped out maybe this year total of a trillion, a rounding error compared to what's happening globally. That's the great reversion that I think it's going to continue. Basically the pendulum of risk assets swung way too far one way. And now it's swinging back the other way. Cryptos were a leading indicator. And they're the hottest, fastest horse in the race, the hottest markets. Now they're coming back. So what I see is happening is we're going to continue that main reversion from prices of condos in Miami to the stock market. And the bond market probably do weather. If we head towards deflationary recession, that's my call. Commodities should collapse. That's not profound. That's typically what they do. The Bloomberg commodity next dropped 20%. It's dropped 50% twice since 2008. And I fully expected again, crude oil should collapse. And Bitcoin should come out ahead with gold and treasury bonds. That's my vision. That's my base case. A key aspect that you point out when you mention your bullishness is the declining supply of Bitcoin and the increasing demand. So increasing demand should not be taken for granted. What are the indicators that you look at when you say that there is likely to be increasing demand for Bitcoin? So the on-chain metrics are pretty positive. We've seen different addresses used. Zero balances addresses. My colleague Jamie Douglas Coots, based in Singapore, has been digging into that. A lot more of it's more functional and anecdotal. And what I hear from inside scoop from people saying, well, OK, well, this is becoming global digital collateral. And it's probably greater risk to not have part of it. And we all know what's happening with supply. It's clearly declining. So that, to me, is the key thing. It's basically becoming competition for bonds and competition for gold. That's nothing new. It's continuing. It's just continuing trends that every day that goes by to this space that doesn't fail becomes more legitimate. And I've been saying those same things for years. So to me, now that we've backed up to the most significant discount almost ever in terms of a 200-week moving average, 100-week moving average, then I think that's going to be more responsive buyers. The key thing what's happened is the opposite is happening in the commodities. You look at commodities like crude oil. It's becoming redundant. And it bumped up. I look at that as that's an endearing bear market. They got very expensive. It's coming back. Bitcoins are enduring bull market that got very cheap. Expect reversion to favor Bitcoin versus things like commodities and crude oil. And to me, that's the key thing I think to expect in 2H. Bitcoin to continue to recover, not trade much below 20,000. Basically, it could obviously get hammered like it did around 5,000. It bought them in there three. But it basically built the base to around 5,000, starting in 2018. And it to come out ahead. And eventually, at some point, if we expect it's a non-trajectory to get to $100,000, it's just a question of time. Because I don't think the adoption is going to do anything but increase. And we know supply can't do anything but decline. To be clear, do you expect this turn to happen within the second half of 2022, right? So Bitcoin recovering, commodities crashing. Yeah, I do. It's already started happening. Copper, the Bloomberg Industrial Metals Index, was up 40% in the year. Now it's down 10%. Copper was up about 10%. Now it's down 20%. Lumber, one of the biggest darlings of the commodity bull market, it's down 50% on the year. Yes, Europe's having some major problems with natural gas, which is more local, but on a global basis. We fully expect energy to do what it always has in history. When it pumps this much, it dumps just as much. It's a question of time. And what we're seeing now is the beginning of a pretty severe global recession. The narrative out of China is very negative. The narrative out of Europe is as negative as it gets in still early days, and they're tightening. And the US is just catching up. We've had two quarters of negative GDP growth. I fully expect we're going to have a pretty severe recession globally, which probably will make Bitcoin shine. Gold and potentially US Treasury, along with gold and US Treasury long bonds. The way I look at LNU and with this Giovanni, I look at Bitcoin is becoming more and more a leveraged version of Treasury bonds and gold, some form of combination of that. So Ethereum is about to undergo one of the major upgrades in its history, which is the merge. So how are you looking at this event? What kind of impact is it going to have on Ethereum, according to you? So in terms of Ethereum, it's much less macroeconomic. And it's much more disruptive technology. And it's in the interest of most people who understand how rapidly technology is advancing to not fade what's happening. So the key thing I'd like to point out about Ethereum, first looking at price, it got to near $5,000. It's corrected to near $1,000 bonds since then. So it's had a substantial correction with an enduring bull market. And the question is, is that sustainable? Now, we fully expect bumps in the road with this rapidly advancing technology. I'm a markets guy. I let the tech people explain it to me. And we're getting some of that. We've had a pretty substantial discount for the switch, for the transition from proof of work to proof of stake. But let's think about what it does and what it's going to do. First of all, it's going to put Ethereum in the space of discounted cash flow. That doesn't exist in any other cryptos. Like, Bitcoin doesn't have cash flow. Like, it's like gold. But once you do that, it brings it into the realm of the world, the masses, who really understand cash flow. The financial analysts, the people really track equities. And that's what we've been proving. We've seen that in the Blomark term. A lot of interest when we wrote about Ethereum becoming part of that discounted cash flow analysis. We can actually get positive cash flows from holding this asset. That brings a world of institutional investors in this space. And that's why I look at Ethereum. It's OK. It might get below 1,000. But I fully think it's going to just backed up with an enduring bullish trajectory. So do you think that with the merge, Ethereum might have a larger upside potential than Bitcoin? Oh, sure. Well, Ethereum's leveraged Bitcoin in a way. I mean, if Bitcoin goes up 1, 2x, Ethereum goes up 4x. I mean, I expect that to continue. And you know, Bitcoin's basically beta in the space. And it should be. But it's macroeconomic beta. Ethereum's more related to what you see in advancing technology, like from the NASDAQ. So yeah, on a bull market, Ethereum will probably outperform. But I think they fit well into a portfolio together with the diversified portfolio of other cryptos. And I believe that's going to be the case. And that's the way I think institutions are looking at it. Why put your eggs in one basket? You might buy Bitcoin as kind of a complement to your bonds and maybe your gold. But you probably want more of a basket of cryptos so you don't have to try to pick out the next winners. Awesome. OK, Mike, that was great conversation. Thanks a lot for coming on our show. Thanks for having me, Giovanni. It's good to talk to you again.