With the ongoing economic uncertainty, investors are searching for products that can potentially provide protection. In this regard, gold and Bitcoin (BTC) are among the assets considered viable options to provide the needed safety.
In this line, senior commodity strategist at Bloomberg Mike McGlone has suggested that gold is likely to showcase its dominance and continue to outperform Bitcoin in the coming months at a time the precious metal seeks to attain new highs, he said in an interview with Red Cloud TV on May 12.
According to McGlone, the possible outperformance is highlighted by factors like the Bitcoin-to-gold ratio. He noted that while gold may no longer be seen as a primary investment asset, it still holds value as a risk-off asset as he maintained his bullish stand on Bitcoin.
“I’m still bullish on Bitcoin, but I think gold’s going to continue outperforming Bitcoin. Remember, I look at things like the Bitcoin gold ratio; it’s right around 14 per ounce. I look at it in this world of rapidly advancing digitalization technology, you can’t really hold gold as an investment anymore without that digital port in there, maybe a couple of percent. I still think this is a risk-off asset,” he said.
Gold’s potential to rally in future
McGlone also expressed uncertainty regarding the potential gold price rally in the future in comparison to Bitcoin. However, it’s worth noting that with the inflationary pressure, both gold and Bitcoin have been touted as possible safe haven assets.
Both asset classes have experienced significant growth in recent months, partly attributed to the ongoing banking crisis.
McGlone’s latest sentiment follows his previous analysis that indicated that gold would likely outperform Bitcoin in a recession, especially if it involves a stock market downturn. This is illustrated in a chart displaying the 100-week moving average of both assets.
In this line, as Finbold reported on May 9, gold-related exchange-traded funds (ETFs) rose by 10% in the past two months, outperforming the benchmark stock market index SPX’s gains of 3% during that period.
As things stand, Bitcoin is trading at $26,810 with daily gains of about 1.5% as the maiden cryptocurrency looks to reclaim the $30,000 spot. According to Kitco data, the precious metal is valued at $2,010 per ounce.
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