The crypto market is emitting historically significant warning signals as comparisons with the period before the 'Great Depression of 1929' raise debates about valuation pressures and deep risk. In the context of a fragile global market, Bitcoin emerges as a potential trigger for significant volatility.

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, shared a series of analyses on social media X this week comparing the developments of the crypto market with historical financial cycles in the United States. He emphasized the similarities with the stock market during 1929, the tense valuation status across various asset types, and the downside risk for bitcoin.

He remarked:

“The trajectory of crypto is repeating that of U.S. stocks in 1929 – The performance of crypto since 2024 closely resembles that of the U.S. stock market after 1928, signaling the potential for a similar outcome.”

McGlone noted that the Bloomberg Galaxy Crypto Index (BGCI) has decreased by about 16% as of January 22, similar to the volatility level of the Dow Jones index during the same period 96 years ago. According to him, the prolonged correlation between speculative assets and the historically overvalued stock market often leads to strong reversals, rather than 'soft landing' scenarios.

Expanding on risk signals, McGlone points out another factor under pressure:

“U.S. Treasury bonds are the cheapest compared to gold since 1982, while the market capitalization ratio of stocks to GDP is at a high equivalent to the end of 1928. This could be the powder keg just waiting for a spark of adjustment, and bitcoin is one of the top potential catalysts.”

In another post, he outlined the risk ceiling scenario:

“Bitcoin at $100,000 with a 5% Treasury bond yield could mark the peak inflation of risky assets.”

He also noted that bitcoin – often seen as a 'pure collateral asset' – has been gradually weakening compared to U.S. Treasury bonds since prices and yields reached extreme levels in 2025.

Although McGlone's perspective is cautious, broader market data still shows that the acceptance of bitcoin within the institutional block continues to expand, managed spot products maintain capital inflows, and the foundational factors of the network remain more robust than in previous macroeconomic downturns. This reinforces bitcoin's long-term role as a non-sovereign asset alongside traditional markets, despite short-term volatility.