Senior commodity strategist at Bloomberg Intelligence, Mike McGlone, acknowledged October has traditionally been the very best month for Bitcoin (BTC) since 2014, averaging positive factors of about 20% for the month, and that commodities showing to peak may suggest 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 when put next 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 in opposition to the Bloomberg Commodity Index, which tracks the worth actions of worldwide commodities resembling gold and crude oil, and means that traditionally Bitcoin volatility is extra more likely to get better as in comparison with commodities when the crypto heads to new highs.
McGlone steered the second half of 2022 may see Bitcoin “shift towards changing into a risk-off asset, like gold and US Treasury’s,” following low volatility all through September and a possible peak in commodity costs.
Prior to now, 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 setting the place buyers want to cut back threat.
Associated: 5 the explanation why Bitcoin may very well 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 appearing extra like “digital gold,” with Bitcoin’s correlation to gold hitting its highest stage in additional than a 12 months at +0.4 following a strengthening of america greenback as rates of interest rise.
A correlation of +1.0 implies that the motion between two totally different belongings is synonymous, for instance a ten% improve in gold could be matched by a ten% improve in Bitcoin ought to the 2 belongings have a correlation of +1.0.
