Analysts are sounding the alarm: overheating of US markets and double risk for bitcoin
Two leading market analysts are simultaneously pointing to a critical overvaluation of U.S. stock markets. Bloomberg Intelligence strategist Mike McGlone warns of a "once-in-a-lifetime reversal," while Bridgewater founder Ray Dalio forecasts negative real returns for U.S. stocks for years to come. Both experts agree on the main point: markets are overheated, and investors should prepare for turbulence.
McGlone: Bitcoin as the First Reversal Indicator
According to McGlone's estimates, the market "dominoes" have already begun to fall. Bitcoin, which previously led the rally, is now the first to decline, signaling a trend change. He pays particular attention to the ratio of U.S. Treasury bonds to gold, which has likely bottomed out at a 40-year low. Summer, in his view, could be extremely turbulent.
A key signal is market expectations. About 80% of participants predict the S&P 500 will rise by year-end, which is an anomaly. For a U.S. midterm election year, a drawdown is typical. McGlone emphasizes: the U.S. stock market capitalization to GDP ratio is currently the highest since 1928–1929. He draws a parallel to 2008, when oil first soared and then crashed. The recent surge in IPOs, in his view, resembles the launch of spot Bitcoin ETFs in 2024, which preceded a market peak. The falling Bitcoin, the strategist believes, is leading this upcoming reversal.
Dalio: AI Concentration as a Dangerous Trap
Ray Dalio paints a similar but expanded picture. He warns that markets are now extremely concentrated in a small group of companies related to artificial intelligence. His forecast for 5–10 years ahead: real returns on U.S. stocks will range from -5% to -10% per year.
Dalio assesses the situation through his "five forces" concept: debt and monetary policy, internal politics, geopolitics, natural phenomena, and technological change. He notes that historically, technology cycles are accompanied by inflated valuations, high volatility, and uncertainty about long-term winners. Therefore, making a large bet on a narrow group of leaders is extremely risky. He advises investors to avoid excessive concentration and form well-diversified portfolios, balanced by risk.
My analysis: Both opinions are linked by a common idea: U.S. markets are overheated and sustained by excessive optimism. For Bitcoin, this creates a double risk. On one hand, as the most liquidity-sensitive risk asset, it may be the first to fall during a general reversal. On the other hand, if overvalued stocks indeed begin to yield negative returns, some capital could eventually flow into Bitcoin as an asset weakly correlated with the stock market. The key question is the speed of this flow and the depth of the initial correction.