Bitcoin appears to be in a consolidating bull market and is poised to cement its status as digital gold, according to a new report from Bloomberg.
The analysis, from Bloomberg Intelligence veteran Mike McGlone, calls BTC a “resting bull” that will benefit from unprecedented levels of quantitative easing from central banks. The report also highlights the fact that BTC is up about 40% in the last 12 months, compared to a 15% drop in the S&P 500.
“Bitcoin and gold appear to be consolidating bull markets that are backing into support zones vs. stocks, less than two months removed from record highs… Bitcoin and gold also stand to be primary beneficiaries of the unprecedented monetary stimulus that’s accompanied by a mean-reverting stock market.”
McGlone expects Bitcoin to outperform Ethereum, XRP and the altcoin market at large due in part to the coronavirus, stating that “Covid-19 distinguishes Bitcoin from [the] rest of cryptos.”
“The macroeconomic effects of the coronavirus accelerate Bitcoin’s process of gaining value relative to other cryptos. Most of the speculative spurt in the Bloomberg Galaxy Crypto Index (BGCI) to start 2020 has dissipated, and on a one-year basis, Bitcoin is up almost 40% to April 2 vs. about a 13% decline in the BGCI…
This year will confirm Bitcoin’s transition from a risk-on speculative asset to the crypto market’s version of gold, in our view.”
According to the report, Bitcoin futures helped tame the cryptocurrency’s notorious volatility and is a sign that BTC is maturing from a purely speculative investment to a digital alternative to gold.
Bloomberg also expects private digital asset projects like Facebook’s Libra to continue to struggle to attain approval from regulators. McGlone says bank regulators are far too skeptical on the reliability of assets created outside of the commercial banking system.
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