Investors should take note – the second half of 2025 could be unfavorable for stock and cryptocurrency markets. Analyst Mike McGlone of Bloomberg Intelligence warns of a possible 50% decline in the prices of risky assets. Weakening labor market data, geopolitical uncertainty, and technical indicators suggest that a period is coming when safer investments, such as gold or government bonds, will significantly outperform stocks.
Investment sentiment is changing – risk is no longer attractive
While the beginning of 2025 was accompanied by a wave of growth, August brought the first serious signs of a slowdown. The S&P 500 index fell by 1.6%, and investors were concerned not only about new US tariff policies but also about disappointing employment figures. Market optimism has been replaced by caution, and capital is beginning to shift to more defensive sectors.
McGlone emphasizes that the current environment favors lower-risk assets. Gold and US bonds outperformed many stocks and cryptocurrencies in the first half of the year. Despite the favorable macroeconomic environment, the latter have still not managed to rebound from stagnation.
Signals from the charts: volatility is rising, gold is strengthening
According to technical indicators, the outlook is unclear, but certainly not calm. The VIX volatility index remains elevated, and the ratio of the price of gold to the S&P 500 index is gradually rising – which, according to historical data, is often a precursor to a larger correction. Similar trends appeared, for example, before the 2008 crisis and during the slumps in the pandemic year 2020.
In his analysis, McGlone also points to the stagnation of the Bloomberg Galaxy Crypto Index, which has not shown any significant movement since the beginning of the year. However, calm in the cryptocurrency market does not usually herald stability, but rather tension before a major swing. If past patterns repeat themselves, 2025 could mark the beginning of a new, significantly defensive phase of the investment cycle.
