Lead Commodity Strategist at Bloomberg Intelligence Mike McGlone defined that October has traditionally been the most effective month for Bitcoin (BTC) since 2014, with common positive factors of round 20% for the month, and that commodities seem like peaking , might point out that Bitcoin has bottomed.
In an Oct. 5 Bloomberg Crypto Outlook report, McGlone says whereas the worldwide rise in rates of interest is placing downward stress on most property, Bitcoin is extraction outperforms commodities and tech shares like Tesla, with the report noting:
“Because the ebbing financial tide turns, we see Bitcoin, Ethereum and the Bloomberg Galaxy Crypto Index tending to outperform most main property.”
McGlone notes that Bitcoin has its lowest-ever volatility in opposition to the Bloomberg Commodity Index, which tracks the worth actions of worldwide commodities comparable to gold and crude oil, and means that traditionally, Bitcoin's volatility is extra more likely to recuperate than commodities if the cryptocurrency is heading for brand new highs.
Bitcoin vs. BCOM and Bitcoin 260-Day Volatility vs. BCOM 260-Day Volatility. Supply: Bloomberg Crypto Outlook
McGlone steered that Bitcoin might “shift in direction of a risk-off asset like gold and U.S. Treasuries” within the second half of 2022 after low volatility in September and a attainable peak in commodity costs.
Traditionally, Bitcoin has been extremely correlated with tech shares, making it a dangerous asset attributable to its volatility that merchants are more likely to promote in an surroundings the place traders are attempting to scale back danger.
Associated: 5 the reason why bitcoin could possibly be a greater long-term funding than gold
Knowledge from Kaiko Analysis was launched on October 4th supports the notion that bitcoin might begin behaving extra like “digital gold,” with bitcoin’s correlation to gold hitting its highest degree in additional than a yr at +0.4 after a strengthening of the US greenback amid rising rates of interest .
Bitcoin's correlation with gold over the past 12 months. Supply: the wharf
A correlation of +1.0 signifies that motion between two completely different property is synonymous, e.g. For instance, a ten% rise in gold could be matched by a ten% rise in bitcoin if the 2 property had a +1.0 correlation.
