McGlone’s Bear Case Just Dropped: Bitcoin’s Hedge Hype Is Deader Than a Paper Hand’s Portfolio

Bloomberg’s Mike McGlone isn’t here to soothe your apes—he’s swinging a bearish bat at Bitcoin’s long-standing reputation as the ultimate portfolio diversifier, and it’s cracking louder than a Terra investor’s psyche. With volatility soaring and its dance card increasingly full of equities, BTC’s “uncorrelated” fairy tale is looking about as real as a $100K moon lamb.

On April 12, McGlone flexed his charts on X (formerly Twitter), dropping a side-by-side of Blackrock’s IBIT and the OG stock-market proxy SPY since spot Bitcoin ETFs launched in January 2024. The numbers? Sobering. “The crypto bear market may be in its early days if performance since bitcoin ETFs began trading in January 2024 is a guide,” he warned, basically telling degens to strap in for turbulence.

And here’s the gut punch: BTC-linked ETFs delivered roughly the same total return beta as the S&P 500—but with nearly 4x the volatility. That’s like paying for a Tesla’s acceleration but getting a go-kart with a nitro boost every three seconds. The 200-day correlation hovering near 0.5? That’s not diversification—that’s Bitcoin slow-dancing with Wall Street, and nobody invited the DJ.

“High volatility and correlation, absent superior returns, typically top the list of things to avoid in proper diversification,” McGlone deadpanned, which is finance-speak for “stop pretending this is magic.” The math doesn’t lie: if you’re getting stock-like returns with crypto-sized swings, you’re not hedging—you’re just stress-testing your therapist’s rates.

Still, let’s not burn the IBIT paper quite yet. Since launch, it’s up ~54%, edging past the S&P 500’s +42%. So yes, absolute returns are flexing—but only if your stomach can handle a rollercoaster designed by a caffeine-fueled coder. It’s like winning a steak dinner after surviving a horror movie: delicious, but was it worth the trauma?

Bitcoin’s currently chilling at $71,883, down from its 2025 blow-off top near $126K, though up 5.6% over the past fortnight. Meanwhile, IBIT has yo-yoed from highs above 60 to lows near 30—proof that this ETF trades less like digital gold and more like a meme stock with a trust fund.

McGlone’s $10K price target? That’s based on mean reversion, viewing the post-2020 rally as a liquidity-fueled fever dream. He’s also dunking on the sea of altcoins flooding the space, calling it a dot-com-style hangover where millions of tokens (and dreams) are priced like they’ve done something. “My bias is the crypto bust may be just beginning,” he said, noting that while there was one Bitcoin in 2009, now there are millions of tokens tracking… vibes. And somehow, they’re still worth billions. Sure, Jan.

But not all hope’s gone. Bitcoin’s still above critical breakdown levels, buoyed by post-halving supply dropping to 450 BTC/day, exchange reserves at a 10-year low of 2.1 million coins (hello, scarcity), and over $54B locked in IBIT. The plumbing’s intact—it’s just that every time the Fed sneezes, the entire crypto market catches pneumonia.

So the verdict? Bitcoin’s got structural fans and hard-coded supply math