BTC to outperform ‘most major assets’ in second half of 2022 – Bloomberg analyst

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Senior commodities strategist at Bloomberg Intelligence, Mike McGlone, said October was historically the best month for Bitcoin (BTC) since 2014, with average gains of around 20% for the month, and commodities seeming peak could imply that Bitcoin has bottomed out. .

In an October 5 Bloomberg Crypto Outlook report, McGlone states that while rising interest rates around the world are putting downward pressure on most assets, Bitcoin is to win the advantage over commodities and tech stocks like Tesla, with the report noting:

“As the economic ebb tide turns, we see the propensity resume for Bitcoin, Ethereum and the Bloomberg Galaxy Crypto Index to outperform most major assets.”

McGlone notes that Bitcoin has its lowest volatility on record compared to the Bloomberg Commodity Index, which tracks the price movements of global commodities such as gold and crude oil, and suggests that historically the volatility of Bitcoin is more likely to recover against commodities when the crypto heads for new highs.

Bitcoin vs BCOM and Bitcoin 260 Day Volatility vs BCOM 260 Day Volatility. Source: Bloomberg Crypto Outlook

McGlone suggested that the second half of 2022 could see Bitcoin “evolve into becoming a risk asset, like gold and the US Treasury,” after low volatility in September and a potential spike in commodity prices.

In the past, Bitcoin was highly correlated to tech stocks, with its volatility making it a risky asset that traders are likely to sell in an environment where investors seek to reduce risk.

Related: 5 Reasons Bitcoin Could Be a Better Long-Term Investment Than Gold

Kaiko Research data released on October 4 supports the idea that Bitcoin may be acting more like “digital gold”, with Bitcoin’s correlation to gold reaching its highest level in over a year at +0.4 following a strengthening of the US dollar as interest rates rise.

Correlation of Bitcoin with Gold over the past 12 months. Source: Kaiko

A correlation of +1.0 means that the movement between two different assets is synonymous, for example a 10% increase in Gold would correspond to a 10% increase in Bitcoin if the two assets had a correlation of +1.0 .

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