Bitcoin Falls Short of Gold’s Performance, Warns Commodity Analyst
Bloomberg’s commodity market expert, Mike McGlone, has raised concerns about the potential downturn for bitcoin in comparison to gold. McGlone highlights the disappointing performance of bitcoin since its peak in 2021, stating that the bitcoin-to-gold ratio has dropped by around 40% from its highest point. He suggests that this decline may be a leading indicator for a recession.
Past Analysis and Recession Possibility
McGlone previously discussed the bitcoin-to-gold ratio in January 2024, where he theorized that bitcoin’s underperformance compared to gold, despite a strong stock market, could indicate either an opportunity for bitcoin to catch up or a looming recession. McGlone leans towards the latter scenario and expresses concerns if the Bitcoin/gold ratio continues to decline.
Factors Contributing to the Shift
The shift in performance is attributed to the end of zero-interest-rate policies (ZIRP) and the liquidity surge in 2021. With the Federal Reserve’s federal fund rate currently at 5.58, the attractiveness of assets like gold and bitcoin, which do not generate earnings or interest, has decreased in portfolios. McGlone suggests that the recent frenzy surrounding crypto exchange-traded funds might be seen as a warning sign.
Hot Take: Is The Glory Days Over for Bitcoin?
Market expert Mike McGlone highlights the underperformance of bitcoin compared to gold, signaling a potential downturn for the cryptocurrency. With the bitcoin-to-gold ratio down by around 40% from its 2021 peak, McGlone suggests that this decline may be a leading indicator for a recession. As the zero-interest-rate policies end and liquidity surges decrease, assets like gold and bitcoin become less attractive in portfolios. This shift in performance raises concerns about the future of bitcoin’s growth potential. Is the glory days over for bitcoin, or can it catch up to its golden counterpart?
Benito Cormi, the brilliant crypto analyst who has made waves in the world of cryptocurrency. With his razor-sharp analytical skills and deep understanding of the digital asset landscape, Benito has become a trusted figure in the industry and remains at the forefront, tirelessly researching and analyzing market trends to help individuals and businesses make informed decisions in this dynamic landscape.