American markets on the verge of a reversal: what this means for Bitcoin
The U.S. market is showing signs of serious overheating, and two leading analysts agree on the risks. Bloomberg Intelligence strategist Mike McGlone warns of a potential "once-in-a-lifetime reversal," while Bridgewater founder Ray Dalio forecasts years of negative real returns for U.S. stocks. Their conclusions complement each other, creating an alarming backdrop for all risk assets, including Bitcoin.
McGlone: The Dominoes Are Already Falling
In my analysis, the market is overheated to the point where any push could trigger a chain reaction. McGlone rightly notes that Bitcoin, which led the market upward first, is now the first to crash. The ratio of U.S. Treasury bonds to gold has hit a forty-year low—a classic signal of skewed investment preferences.
Particularly telling is that about 80% of market participants expect the S&P 500 index to rise by year-end. In a typical U.S. midterm election year, such consolidated confidence is a warning sign. The U.S. stock market capitalization relative to GDP is now the highest since 1928–1929, inevitably drawing historical parallels.
McGlone draws a parallel to 2008, when oil first surged and then collapsed. The recent IPO boom resembles the launch of cryptocurrency ETFs in 2024—an event that preceded the market peak. The falling Bitcoin, in his view, is precisely leading this future reversal.
Dalio: Concentration in AI Is Dangerous
Ray Dalio paints a similar but distinct picture. He warns that markets are now extremely concentrated in a small group of large companies related to artificial intelligence. According to his forecast, the real return on U.S. stocks could range from -5% to -10% per year over a 5–10 year horizon.
Dalio assesses the situation through the concept of "five forces": debt and monetary policy, domestic politics, geopolitics, natural phenomena, and technological change. He emphasizes that historical technology cycles are typically accompanied by inflated valuations, high volatility, and unclear long-term winners.
Dalio's advice is to avoid excessive concentration and build well-diversified portfolios balanced by risk. This approach improves outcomes in conditions of high macroeconomic uncertainty.
Expert Commentary: For Bitcoin, this is a double risk. On one hand, as the risk asset most sensitive to liquidity, it may be the first to fall during a broad reversal. On the other hand, if overvalued stocks indeed deliver negative returns, some capital could eventually flow into Bitcoin as an asset weakly correlated with the stock market. In the coming months, we will likely see increased volatility and a test of Bitcoin's strength around key support levels.