According to a report, the value of Bitcoin (CRYPTO: BTC) against gold could potentially decrease by 50%.
What Happened: Mike McGlone of Bloomberg Intelligence has expressed concerns about the Bitcoin-gold cross.
Currently, the value of Bitcoin is approximately 20 times that of gold. However, McGlone predicts that by 2026, it’s more likely for Bitcoin’s value to drop to 10 times the value of gold rather than rise to 30 times.
According to McGlone’s analysis, Bitcoin’s purchasing power compared to gold could be halved, even if the USD chart doesn’t show as significant a change.
As per the report, he emphasized that the Bitcoin-to-gold ratio often acts as an early warning chart, indicating an increased risk of recession.
McGlone also noted that the correlation between stocks, market volatility, and the Bitcoin/gold cross is higher than commonly acknowledged, with the correlation sitting near 0.5376. This suggests that they are all part of one “risk-on, risk-off” package.
Also Read: JPMorgan Forecasts Bitcoin Bottom, Anticipates $28.3 Trillion Challenge To Gold By 2026
Looking ahead to 2026, McGlone predicts potential lows: core CPI easing toward 1%, oil near $40, gasoline around $2, and Bitcoin around $50,000.
Why It Matters: The predicted decrease in Bitcoin’s value against gold could have significant implications for investors. As Bitcoin and gold are often seen as alternative investments, a decrease in Bitcoin’s value could lead to a shift in investment strategies.
Additionally, the high correlation between stocks, market volatility, and the Bitcoin/gold cross suggests that changes in one could potentially affect the others. As such, investors should keep a close eye on these developments.
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