Bloomberg Intelligence’s senior commodity strategist, Mike McGlone, has issued a stark warning: cryptocurrencies are set to underperform every other major asset class in 2025. Despite the continued bullish sentiment from segments of the market, McGlone maintains that the crypto sector is at risk of being the year’s biggest laggard, while both Bitcoin and government bonds could emerge as relative winners.
BGCI Tracks S&P 500—But Volatility Remains a Red Flag
According to McGlone, the Bloomberg Galaxy Crypto Index (BGCI) has posted a 7% gain year-to-date as of August 1—roughly mirroring the S&P 500’s performance. This is notable, considering the Bloomberg Dollar Index has dropped 7.5% in the same period. However, McGlone points out that BGCI’s volatility remains approximately four times higher than the S&P 500, raising concerns about the sector’s risk-adjusted returns and stability heading into the second half of the year.
“Stable returns for crypto in 2025, despite outsized volatility, could be a warning sign for investors,” McGlone cautioned, noting the historical tendency for highly volatile markets to reverse sharply.
Base case update: I expect 2025 to be a down year for the US stock market, marking the beginning of the third 50% drawdown since 2000. Gold and T-bonds are poised to be top performers, while cryptocurrencies are likely to be the worst. The Bloomberg Galaxy Crypto Index (BGCI) is… pic.twitter.com/mbDFBFG94U
— Mike McGlone (@mikemcglone11) August 2, 2025
Third Major Stock Market Drawdown Looming?
Looking beyond crypto, McGlone expects 2025 to be challenging for the U.S. equity market as well, forecasting what could be the third 50% drawdown since 2000. Against this backdrop, he identifies government bonds and Bitcoin as potential leaders—an unusual pairing that reflects his skepticism toward risk assets and equities.
Persistently Bearish on Crypto—Despite Bull Runs
Notably, McGlone has maintained a bearish stance on Bitcoin for some time, previously calling for a potential drop to $10,000. Although Bitcoin later set fresh all-time highs, the strategist has not wavered in his cautious outlook for the digital asset class as a whole, emphasizing macro risks and high volatility.
Key Takeaways
- Bloomberg’s McGlone forecasts crypto as 2025’s weakest major asset class
- BGCI up 7% YTD, matching S&P 500—despite far higher volatility
- Analyst expects significant drawdowns in U.S. equities and continued headwinds for crypto
- Bitcoin and government bonds seen as potential outliers for positive performance