Mike McGlone Warns of Late Cycle Risk Across Markets

Market optimism looks fragile, at least through the lens of Mike McGlone. In a long form interview, the Bloomberg Intelligence strategist laid out a view shaped by late cycle pressure, stretched valuations, and rising downside risk across nearly every major asset class.

Good to Know

• McGlone sees bitcoin as a signal of broader market stress
• He expects pressure on equities, crypto, and commodities
• US Treasurys remain his preferred defensive asset

McGlone Flags Late Cycle Risk Across Markets

Mike McGlone shared his outlook during a wide ranging conversation with David Lin on The David Lin Report. He framed the current market as one driven by excess rather than opportunity, with risk building quietly across equities, crypto, and commodities.

“I see a hurricane coming,” McGlone said.

He argued that many assets now sit at levels that leave little margin for error, especially after years of easy financial conditions and rising leverage.

Bitcoin Seen as Early Warning Signal

McGlone focused heavily on bitcoin, calling it a leading indicator rather than a safe haven. He said crypto markets already started rolling over, well before broader stress shows up elsewhere.

“Bitcoin, the first stop is around $50,000… I think it’s going to $10,000,” he said.

He has repeated that view in past cycles and sees recent price action as confirmation. In his view, bitcoin peaked during the period that followed spot bitcoin ETF approvals and the US presidential election, which he described as the final phase of speculative excess.

Crypto and Equities Now Move Together

A core concern for McGlone centers on correlation. He told Lin that bitcoin no longer trades as an independent asset.

“They’re all correlated,” he said.

According to McGlone, bitcoin increasingly behaves like a leveraged equity rather than a hedge. As a result, pressure in stock markets may amplify downside moves in crypto rather than offset them.

Equity Valuations Raise Red Flags

McGlone extended his caution to US equities. He pointed to stock market value relative to gross domestic product as remaining near historical extremes.

He warned that even a pullback toward the 200 day moving average for the S and P 500 could trigger broader deleveraging.

“We’re overdue,” McGlone said, noting the lack of a deep market reset since 2008.

“All the signs are there for me.”

Gold Looks Extended After Historic Run

Despite long standing support for gold, McGlone expressed caution on precious metals following their strongest annual performance since 1979.

“Gold is way too stretched for me,” he said.

He warned that extreme price moves often precede sharp pullbacks. While he still sees a path toward $5,000 per ounce over time, he advised against chasing the market after such a rapid rise, framing current price behavior as a warning rather than confirmation.

Deflation Shapes the Policy Outlook

On monetary policy, McGlone said recent Federal Reserve Treasury purchases resemble early easing steps, even if officials avoid that label.

He expects deflation, not inflation, to dominate in 2026 as global growth slows. Falling energy prices, weakening demand, and slower activity in China all support that view.

“Crude oil is heading lower, so I’m pointing that out,” he said.

Natural gas prices have also moved lower, reinforcing his outlook.

Treasurys Stand Out as Defensive Choice

Among major asset classes, McGlone said US Treasurys offer the clearest protection if risk assets fall. He described long duration bonds as a practical hedge against equity drawdowns.

“Treasury bonds… that’s the bias for next year,” he said.

He closed with a warning on investor psychology. Volatility measures remain near multi year lows, which he sees as a sign of complacency.

“People are just waiting for a trigger,” McGlone said. “That move is sell.”