Bloomberg’s financial research arm says Bitcoin (BTC) and gold are the “top candidates to advance” this year as the coronavirus pandemic creates ideal conditions for the assets to soar.
The latest commodity outlook from Bloomberg Intelligence reports BTC and gold are setting the stage for a possible spike in value. Says Bloomberg Intelligence strategist Mike McGlone via Kitco,
“Among the few assets up in this tumultuous year, gold and bitcoin are building foundations for further price appreciation… Our graphic depicts gold consolidating above what had been key resistance of $1,700 an ounce before the March swoon. Every day that passes above this level builds a firmer base for the metal to make the next move in its stair-step rally.
Bitcoin is in a similar consolidation between $9,000-$10,000. We view the benchmark crypto as a resting bull that likely needs something to change significantly in its 10-or-so-year history to not just resume doing what it was doing: appreciating. If the stock market rolls over, gold and Bitcoin should gain buoyancy.”
Historically, the correlation between Bitcoin and gold has remained low. But investment management firm VanEck says the correlation between the two assets has significantly increased as of late.
“Short term, the market sell-off induced by the COVID-19 pandemic increased bitcoin correlations with traditional asset classes—particularly gold, potentially hinting at bitcoin’s increasing safe-haven status.”