Bitcoin Faces Challenges as It Lags Behind Gold, Says Bloomberg Strategist

Mike McGlone, Bloomberg Intelligence's chief commodity strategist, recently shared insights on Bitcoin, gold, and their relationship with copper via his X account.

He noted that Bitcoin has been underperforming compared to gold, despite a robust SP 500.

Gold Outperforming Bitcoin and Elevated Risk Assets – #Bitcoin lagging #gold despite the record-setting SP 500 may augur headwinds for risk assets. At 24 ounces of the metal equal to the crypto on Oct. 22, the Bitcoin/gold ratio is below a high of 34 in March and a 2021 peak of… pic.twitter.com/oqYxi2yZht

— Mike McGlone (@mikemcglone11) October 23, 2024

In October, often referred to as “Uptober” by crypto enthusiasts, the value of one Bitcoin dropped to 24 ounces of gold as the precious metal reached a four-year high of $2,713.88 per ounce.

This is a significant decline from March, when one Bitcoin was equivalent to 34 ounces of gold, and even lower than the 37 ounces in 2021. McGlone suggested that Bitcoin could encounter challenges ahead, especially given the current strength of the stock market alongside its declining value.

While some, like Bitcoin advisor Max Keiser, remain optimistic about Bitcoin potentially hitting $220,000, McGlone highlighted a concerning correlation between Bitcoin and copper.

Both assets seem to be struggling in the context of a rising stock market, with Bitcoin exhibiting characteristics of a risky stock rather than a safe haven. He emphasized that Bitcoin’s volatility, like copper’s, must increase to support further price growth.