BTC to outperform ‘most major assets’ in H2 2022 — Bloomberg analyst

Bloomberg Intelligence Senior Commodity Strategist Mike McGlone stated that October has historically been the best month for Bitcoin (BTC) since 2014, with average gains of approximately 20% for the month, and that the Commodities that appear to be peaking could imply that Bitcoin has bottomed out. .

In an Oct. 5 Bloomberg Crypto Outlook report, McGlone says that while rising interest rates globally are putting downward pressure on most assets, Bitcoin is gaining ground against commodities and tech stocks like Tesla, and the report notes:

“When the economic tide ebbs, we see a resumption of the propensity of Bitcoin, Ethereum and the Bloomberg Galaxy Crypto Index to outperform most major assets.”

McGlone notes that Bitcoin has its lowest volatility relative to the Bloomberg Commodity Index, which tracks the price movements of global commodities such as gold and crude oil, and suggests that it is historically more likely Bitcoin volatility recovers against commodities as the crypto heads to new highs.

Bitcoin vs BCOM and 260 day volatility of Bitcoin vs 260 day volatility of BCOM. Source: Bloomberg Crypto Outlook

McGlone suggested that the second half of 2022 could see Bitcoin “shift into a risk-free asset, like gold and US Treasuries,” after low volatility throughout September and a potential peak in commodity prices.

Bitcoin has historically been highly correlated with tech stocks, and its volatility makes it a risky asset that traders are likely to sell in an environment where investors are looking to reduce risk.

Related: 5 Reasons Why Bitcoin Could Be A Better Long-Term Investment Than Gold

Data from Kaiko Research released on October 4 supports the idea that Bitcoin may be transitioning to act more like “digital gold”, with Bitcoin’s correlation to gold reaching its highest level in more than d ‘a year to +0.4 after a strengthening of the US dollar. as interest rates rise.

Bitcoin’s correlation to gold over the past 12 months. Source: Kaiko

A correlation of +1.0 means that the movement between two different assets is synonymous, for example a 10% rise in gold would be matched by a 10% rise in Bitcoin if the two assets have a correlation of +1 ,0.