Bitcoin ‘showing more strength’ than Gold even as Gold hits all-time high: Bloomberg analyst
Bitcoin volatility is still a barrier to reliable safe-haven status.
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As the price of gold surged to an all-time high on Monday, breaking through the key $2,100 level, Bitcoin has rallied even more strongly, showing “more strength” than the precious metal, said Bloomberg Intelligence commodity strategist Mike McGlone today in an interview.
Gold rallied as much as 3% to a record $2,135 per ounce, boosted by a decline in the US dollar and bets that the Federal Reserve would cut interest rates in 2020. It then pulled back 5.1% to $2,025. Meanwhile, Bitcoin rallied 6.2% to over $42,000 before slipping under 1% to trade around $41,700, based on data from CoinGecko.
“Gold was the story overnight and it came off all-time new highs, and the digital gold is still showing more strength,” McGlone said in an interview today.
McGlone went on to say he was “very impressed” with Bitcoin’s strength despite stock market weakness. However, McGlone cautioned that Bitcoin’s volatility may prevent it from reliably trading like gold during risk-off periods in markets.
“I am just not ready to say this highly volatile asset is going to trade more like a low volatility risk-off asset like gold,” said McGlone.
According to McGlone, for Bitcoin to truly compete with gold as an alternative asset, it must establish some key markers of reliability such as being negatively correlated with the stock market and offsetting high deficits during periods of monetary expansion. “So far today [BTC] is doing quite well,” said McGlone.
In a recent Bloomberg Terminal note, McGlone wrote that gold may have the upper hand over Bitcoin in 2023. But Bitcoin’s strength so far seems to defy that prediction.
Bitcoin is up 2.1% over the past 24 hours and more than 142% since the start of the year, according to CoinGecko.