Bitcoin’s Volatility Compared to Gold and the U.S. Dollar: A Senior Analyst’s Viewpoint
In a recent panel discussion, senior commodity analyst Mike McGlone shared his perspective on the market’s volatility, highlighting the position of Bitcoin (BTC) in comparison to gold and the U.S. dollar from an investment standpoint. McGlone emphasized that Bitcoin’s volatility could put it behind traditional assets like gold and the U.S. dollar in certain scenarios, including potential crashes during a recession.
Insights from the Analyst
– McGlone, a senior commodity analyst at Bloomberg, expressed his views at a panel during Bitcoinday Miami.
– He pointed out that Tether’s dollar stablecoin (USDT) typically trades at twice the volume of Bitcoin on an average day.
– McGlone highlighted the global preference for the U.S. dollar due to its status as the “least worst” fiat currency, making it a popular choice in the crypto market.
“Right now, I can have access to the U.S. dollar any place in the world from my phone [with] Tether. Tether is the number one trading token. It’s the number one trading crypto. It doubles the value in a typical day over Bitcoin. It’s the dollar. The whole world has gone to the dollar. Why? Because it’s the least worst of all fiat currencies.”
Mike McGlone
Bitcoin’s Performance in a Recession
– McGlone expressed doubts about Bitcoin’s performance during a recession compared to other assets.
– He raised concerns about the volatility of Bitcoin and its susceptibility to market downturns, suggesting that it may crash harder than the stock market in such scenarios.
– The analyst highlighted stablecoin issuers’ preference for backing their assets with low-volatility options like treasury bonds, contrasting it with Bitcoin’s higher volatility.
“So, please be concerned about beta [of volatility]. (…) $55 trillion is the total capitalization of the U.S. stock market. It’s two times GDP. That’s the most since 1937. That’s how expensive everything is right now. Bitcoin trades three times the volatility of the stock market on a normal basis. So, when—I didn’t say if—the stock market has a normal correction versus GDP, Bitcoin is more likely to go down initially. Gold is more likely to go up.”
Mike McGlone
Tether’s Trading Volume Comparison
– Data from Santiment revealed interesting insights into the trading volumes of Tether’s USDT and Bitcoin.
– At the time of analysis, USDT’s trading volume stood at $41.76 billion, significantly higher than Bitcoin’s $14.59 billion volume.
– This disparity reflected a ratio of 2.86:1 in favor of Tether’s U.S. dollar trading volume over Bitcoin.
Concluding Thoughts
– While McGlone remains optimistic about Bitcoin’s long-term potential, he maintains a cautious stance on its suitability as a reliable investment asset or hedge against recessions.
– The analyst emphasizes the significance of volatility in determining Bitcoin’s performance and suggests that assets like the U.S. dollar and gold may offer more stability and hedging capabilities in uncertain market conditions.
Hot Take: Reassessing Bitcoin’s Position in the Market
As you navigate the volatile waters of the cryptocurrency market, it’s essential to consider different perspectives on assets like Bitcoin. McGlone’s insights shed light on the complexities of assessing Bitcoin’s role as an investment asset and its performance during market downturns. Understanding the interplay between volatility, traditional assets, and digital currencies can help you make informed decisions in your investment journey.
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