Two seasoned analysts at once are warning of risks to overvalued American markets. Bloomberg Intelligence strategist Mike McGlone speaks of a possible "once-in-a-lifetime reversal," while Bridgewater founder Ray Dalio forecasts negative real returns on U.S. stocks for years to come. Both agree that the markets are too overheated.

Their conclusions complement each other: McGlone looks at the reversal through market cycles and bitcoin's behavior (BTC), while Dalio does so through macroeconomics and the dangerous concentration of capital in AI companies.

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McGlone: the dominoes may start to fall

In McGlone's view, the market "dominoes" are already beginning to fall. Bitcoin was the first to lead the market up, and now it is the first to collapse. The strategist drew attention to the fact that the ratio of U.S. savings to gold appears to be approaching one of its historical lows. In his opinion, the summer could turn out to be merciless.

The researcher emphasized: market expectations are especially telling. About 80% of participants forecast growth in the S&P 500 index by year-end, whereas a drawdown is more likely for a typical U.S. midterm-election year. McGlone points out that the capitalization of the U.S. stock market relative to GDP is now the highest since 1928–1929.

The strategist drew a parallel with 2008, when oil first soared and then crashed. In his assessment, the recent surge in initial public offerings (IPOs) resembles the launch of cryptocurrency exchange-traded funds (ETFs) in 2024, which foreshadowed the market peak. The falling bitcoin, in his view, is precisely what is getting ahead of this coming reversal.

Dalio: concentration in AI is dangerous

A different but consonant picture is painted by Ray Dalio. He warns that the markets are now extremely concentrated in a small group of large companies tied to artificial intelligence. According to his forecast, the real return on U.S. stocks could range from −5% to −10% per year over a horizon of 5–10 years.

Source: BeInCrypto