Bitcoin’s Outperformance of Gold May Indicate Supercycle, Says Bloomberg Strategist
Bloomberg's senior macro strategist, Mike McGlone, believes that Bitcoin's recent outperformance of gold could indicate the start of a new supercycle for the leading cryptocurrency.
In a tweet to his 55,000 Twitter followers, McGlone points out that BTC has beaten gold, the top-performing old-guard commodity in 2023, by almost ten times. He attributes this to the digital assets’ low and rising adoption rate and diminishing supply.
Looking for a super cycle? Bitcoin Outperforms #Commodities With Declining Risk – #Bitcoin beating #gold, the top-performing old-guard commodity in 2023 to March 20, by almost 10x may be indicative of a super cycle happening in the #crypto. pic.twitter.com/DGdAL3PW3C
— Mike McGlone (@mikemcglone11) March 21, 2023
Bitcoin’s advantages over gold
One of Bitcoin’s key advantages over gold is its potential for long-term growth. While gold has been a safe-haven asset for centuries, Bitcoin has only existed for a little over a decade.
As more people become aware of BTC’s potential as a store of value, its adoption rate is likely to continue to rise. In contrast, the supply of gold is finite, and a limited amount of the precious metal can be mined.
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Bitcoin’s transition from risk-on to defensive investment
McGlone believes that Bitcoin may be in a transitionary period, shifting from being a risk-on asset to a more defensive investment against economic instability and banking crises. He compares Bitcoin to the KBW banking index, which tracks publicly traded banks and thrifts in the United States.
According to McGlone, BTC’s relative strength versus most assets could indicate its inflection towards global digital collateral and its potential to trade more like gold and US Treasury bonds.
Relative strength vs most assets may portend #Bitcoin's inflection toward global digital collateral and potential to trade more like #gold, US Treasury #bonds. Central banks still tightening despite plunging #commodities and a #BankingCrisis adds to severe economic-reset risks pic.twitter.com/OhZOnbbbNw
— Mike McGlone (@mikemcglone11) March 21, 2023
Global economy’s Shift Towards Bitcoin, Gold, and Bonds
McGlone also suggests that the global economy is shifting towards Bitcoin, gold, and bonds due to the current recession. He believes investors will be looking to buy dips in these assets as the world tilts toward a recession.
Furthermore, he predicts that the global economy will not go through the same periods of heavy dollar liquidity as it did in the past, forcing investors to take a more keen stance on Bitcoin, gold, and bonds.
In conclusion, Bitcoin’s recent outperformance of gold and its potential for long-term growth and defensive investment make it an attractive asset for investors in these uncertain times. As the global economy shifts towards a recession, Bitcoin, gold, and bonds may become even more valuable as investors seek to mitigate risk and find safe-haven assets.