“Bitcoin typically outperforms when the liquidity pump is on, and it underperforms when the liquidity pump is off,” Melker, a senior macro strategist, told crypto trader Scott Melker.
Melker pointed out the stark reality that the liquidity pump is currently "way off," referencing the Fed fund futures which indicate interest rates hovering around 5% in the coming year. This suggests a bleak outlook for the revival of the liquidity pump.
Also Read: Former ARK Invest Head Sees Upward Reversal for Crypto Markets: Time To Start Accumulating?
McGlone elaborated on his views via social media.
"Bitcoin might be akin to a teenager raised on a high-sugar/stimulant diet of extraordinarily low-interest rates and facing weaning," he said on X.
Bitcoin faces challenges, especially with the looming prospect of 5% US Treasury bills and deflating producer prices, he explained.
McGlone also cautions against the risks associated with the popular belief that assets that have seen an upward trajectory will continue to do so. See below:
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