Bitcoin Falls Behind Gold, Warns Bloomberg Analyst

In a recent assessment, Mike McGlone, a commodities analyst at Bloomberg, has pointed out that Bitcoin (BTC) has been trailing behind gold since reaching its peak in 2021. McGlone, on Sunday, offered his latest evaluation of specific commodities, including BTC in his analysis. He stated, "Identifying patterns, gaps, and gold versus Bitcoin - Since the inception of trading in 1997, S&P 500 E-mini futures have never left gaps on weekly charts until December, from 4614 to 4652, which has implications for risk assets."

"My chart shows two previous chart gaps since 2017 that were subsequently filled. Notably, the Bitcoin-to-gold ratio, which tends to lead in beta testing, has declined since the largest cash inflow in history until the 2021 peak. The highly speculative digital asset, traded 24-7, may be the primary leading indicator and equivalent to about 21 ounces of gold as of January 2nd. The ratio is approximately 40% below the 2021 peak of 37."

McGlone's ideas on this topic are not new; he previously discussed the Bitcoin-to-gold ratio on January 23, 2024. McGlone speculated that Bitcoin's low performance compared to gold, despite the strong performance of the US stock market since 2021, could signal either an opportunity for Bitcoin to catch up or indicate a recession. He leans towards the possibility of a recession, emphasizing concerns if the Bitcoin/gold ratio continues to decline.

This shift is attributed to the end of zero-interest-rate policy (ZIRP) and a surge in liquidity in 2021. With the current Federal Reserve funds rate at 5.58, the landscape has changed, affecting assets like gold and Bitcoin that do not generate profits or interest, making them less attractive in portfolios. "The madness of crypto exchange-traded funds can be seen as a bell ringing at the top," McGlone warned.