Mike McGlone, senior commodity strategist at Bloomberg Intelligence, a research platform that provides information on industries, companies and government policies, shared his views on the convergence of Bitcoin's volatility with gold in a tweet.
Bloomberg Strategist Evaluates Bitcoin's Volatility Convergence With Gold
McGlone wrote: “As bitcoin volatility has more bearish areas than most traditional assets, the relative risk of crypto may continue to drop.
My chart shows that the 90-day volatility of Bitcoin, which is about 3 times that of gold, is still relatively high compared to the traditional store of value, but far from the peak of about 12 times in 2018.”
Bitcoin-to-Gold Volatility Convergence –
It's because #Bitcoin volatility has more room to decline than most traditional assets that the crypto's relative risk might continue to fall. At about 3x that of #gold, my graphic shows Bitcoin's 90-day volatility still relatively… pic.twitter.com/o79E7JtEZb— Mike McGlone (@mikemcglone11) August 20, 2023
McGlone announced that the volatility of most asset classes fell in 2023 due to disruptions in 2022, marked by the global pandemic and economic crisis.
Looking ahead, however, he added that the failure of Bitcoin risk metrics to continue to converge with gold could point to a lack of proper assimilation for the digital version of the precious metal.
He also stated that this is one of the reasons he believes the days of the great Bitcoin pump are over.
He argued that futures, cash-carrying arbitrage, and exchange-traded funds are characteristic of crypto's maturation process, which could mean a deterioration in its nascent vitality.
McGlone is known for his bullish view on Bitcoin and other cryptocurrencies. He previously predicted that Bitcoin could reach $100,000 by 2025 and outperform gold as a store of value in the long run.
He also commented on the impact of China's ban on crypto mining and trading and the rise of stablecoins and non-exchangeable tokens (NFTs) in the crypto market.
*Not investment advice.
