Analysts are unanimous: U.S. markets are overheated — bitcoin under threat
Two globally recognized experts are simultaneously warning about the critical overheating of the U.S. stock market. Bloomberg Intelligence strategist Mike McGlone speaks of a "once-in-a-lifetime reversal," while Bridgewater founder Ray Dalio forecasts negative real returns for U.S. stocks for years to come. Their conclusions complement each other, painting an extremely alarming picture for traditional markets and, crucially, for Bitcoin.
McGlone: The Dominoes Are Falling, Bitcoin Leads the Way
In my deep conviction, McGlone is absolutely right in pointing out that the market "dominoes" have already begun to fall. Bitcoin, which first led the market upward, is now the first to crash. The strategist highlights a critical indicator: the ratio of U.S. government bonds to gold appears to have bottomed out at a forty-year low. Summer, he says, could prove extremely turbulent.
The analysis of market expectations is particularly telling. About 80% of participants predict a rise in the S&P 500 index by year-end, whereas historically, a drawdown is more likely during U.S. midterm elections. The U.S. stock market capitalization relative to GDP is currently at its highest level since 1928-1929. McGlone draws a parallel with 2008, when oil first soared and then collapsed. The recent surge in initial public offerings (IPOs) and the launch of spot Bitcoin ETFs in 2024, in his view, also preceded the market peak. A falling Bitcoin, as he rightly notes, is leading this future reversal.
Dalio: Concentration in AI Is Dangerous
Ray Dalio paints a similar but more macroeconomic picture. He warns that markets are now extremely concentrated in a small group of large companies related to artificial intelligence. His forecast is that real returns on U.S. stocks could range from -5% to -10% per year over a 5-10 year horizon. Dalio assesses the situation through his concept of the "five forces": debt and monetary policy, internal politics, geopolitics, natural phenomena, and technological change.
According to him, historical technology cycles are always accompanied by inflated valuations, high volatility, and uncertain long-term winners. Therefore, making a large bet on a narrow group of leaders, in Dalio's view, is extremely risky. He advises investors to avoid excessive concentration and instead build well-diversified portfolios balanced by risk. Such an approach, in my opinion, is the only sensible one amid high macroeconomic uncertainty.
My Expert Conclusion: Both opinions are linked by a common thread: U.S. markets are overheated, overvalued, and sustained by excessive optimism, whether through bets on index growth or concentration in AI stocks. For Bitcoin, this carries a double risk. On one hand, as the most liquidity-sensitive risky asset, it may be the first to fall during a broad reversal. On the other hand, if overvalued stocks indeed deliver negative returns and investors begin seeking diversification, some capital could eventually flow into Bitcoin as an asset weakly correlated with the stock market. However, in the short term, pressure on BTC will only intensify.