Senior commodity strategist at Bloomberg Intelligence, Mike McGlone, said October has traditionally been the most effective month for Bitcoin (BTC) since 2014, averaging good points of about 20% for the month, and that commodities showing to peak might indicate that Bitcoin has reached its backside.
In an Oct. 5 Bloomberg Crypto Outlook report, McGlone says whereas the rise of rates of interest globally is placing downwards strain on most belongings, Bitcoin is gaining the higher hand in comparison with commodities and tech shares like Tesla, with the report noting:
“When the ebbing financial tide turns, we see the propensity resuming for Bitcoin, Ethereum, and the Bloomberg Galaxy Crypto Index to outperform most main belongings.”
McGlone notes that Bitcoin has its lowest ever volatility towards the Bloomberg Commodity Index, which tracks the value actions of worldwide commodities comparable to gold and crude oil, and means that traditionally Bitcoin volatility is extra more likely to get well as in comparison with commodities when the crypto heads to new highs.
Bitcoin vs BCOM and Bitcoin 260 day volatility vs BCOM 260 day volatility. Supply: Bloomberg Crypto Outlook
McGlone prompt the second half of 2022 might see Bitcoin “shift towards turning into a risk-off asset, like gold and US Treasury’s,” following low volatility all through September and a possible peak in commodity costs.
Previously, Bitcoin has been extremely correlated with tech shares, with its volatility making it a dangerous asset that merchants are more likely to promote in an atmosphere the place traders want to cut back danger.
Associated: 5 the reason why Bitcoin might be a greater long-term funding than gold
Kaiko Analysis knowledge launched on Oct. 4 helps the notion that Bitcoin could also be transitioning to performing extra like “digital gold,” with Bitcoin’s correlation to gold hitting its highest stage in additional than a yr at +0.4 following a strengthening of the US greenback as rates of interest rise.
Bitcoin’s correlation with gold during the last 12 months. Supply: Kaiko
A correlation of +1.0 signifies that the motion between two completely different belongings is synonymous, for instance a ten% enhance in gold can be matched by a ten% enhance in Bitcoin ought to the 2 belongings have a correlation of +1.0.
