Though some experts, analysts, and marketers have been rhetorically placing gold and Bitcoin (BTC) in the same category for years, they have seemingly diverged in significant ways in 2024.
Indeed, while gold has been rising at an incredible pace as economic and geopolitical concerns mount, BTC’s trading is more risk-off, with the most striking example coming at the height of the Israel-Iran war scare when fears seemingly outweighed the optimism stemming from the halving event.
Despite the world’s premier cryptocurrency seeing its highest month-end prices on record in March, Bloomberg’s Senior Commodity Strategist Mike McGlone opined in a recent X post that gold has a substantial upper hand compared to Bitcoin – and, indeed, compared to the S&P 500.
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BTC in particular, stands in contrast with gold as, after hitting a new all-time high in March, it saw a massive decline in April which, by May, saw it drop to approximatelly $57,000 – a level some experts identified as a crucial support zone – while the world’s top commodity ended the fourth month at its own record price.
Gains for gold and pain for Bitcoin
McGlone’s most recent analysis follows his previous assessments closely as he sees substantial volatility and arguably the anomalous performance of stocks in a high interest rate environment as some of the crucial headwinds for BTC and S&P 500 and important tailwinds for gold and other commodities.
Additionally, stocks and cryptocurrencies may face trouble ahead in similar ways to commodities when they had to swallow a price cure resulting from a COVID-era price surge back in 2022 before reentering the more recent rally.
“A primary headwind for the S&P 500 may be the high-price cure example that’s afflicted most commodities since 2022. It’s likely not a coincidence that #inflation has remained sticky and FederalReserve rate-cut risks have leaned toward hikes, on the back of the rapidly rising stock index closing at the 5,254 high in 1Q.”
The expert also assessed that the increasingly hawkish rhetoric coming out of the FED is likely only to further emphasize the dynamic, which leans well into his previous forecast that gold is set to surge toward $3,000 per ounce this year.
Finally, McGlone also linked the likely upcoming fortunes of the wider cryptocurrency market to the apparent slowdown that is affecting the stock market and its major indices and explained it might struggle to maintain momentum should the S&P 500 truly end its “almost straight up rally’ – a scenario he judged likely with recent recessionary forecasts – that started after they hit October 2023 lows.
Still, it is noteworthy that the macro strategist’s forecasts – when it comes to cryptocurrencies at least – haven’t historically been the most accurate given that he forecast trouble ahead for the crypto markets less than a month before they entered into a major rally.
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