Bloomberg Intelligence’s Chief Commodity Strategist Mike McGlone took to the X app to analyze how the tension of the expected spot Bitcoin (BTC) Exchange Traded Fund (ETF) approval is impacting negatively on Gold.
McGlone Foresees Sharp Decline in Gold Holdings
McGlone stated that gold and ETFs that are related to the assets have seen a sharp decline in their holdings recently. The latest development was linked to the soon-to-be-launched United States spot BTC ETFs, with the strategist citing that Bitcoin has been expanding sporadically in light of the upcoming approval from the Securities and Exchange Commission (SEC) for the ETFs.
Gold ETF Outflows Could Be Making Room for Digital –
Decreases in #gold-ETF holdings and competition from rising US rates and #stockmarket prices in 2023 have been strong headwinds for the metal, yet this year’s average price to Oct. 24 of $1,929 an ounce is the highest ever.… pic.twitter.com/qM7xyZqVFj
— Mike McGlone (@mikemcglone11) October 25, 2023
The expert went on to share his perception of why Bitcoin’s superiority over gold is on the high side, highlighting that in the long run, the leading cryptocurrency would likely “replace bullion.” On the other hand, he stated that the Bloomberg Intelligence bias is maintaining its positive outlook on the bullishness of gold, even in the face of the U.S. recession.
Meanwhile, the market expert did not fail to acknowledge that Bitcoin’s recent divergent strength vs. stocks and bonds has shown a significant level of maturation and diversification.
Bitcoin Outperforms Gold
It is worth noting that Bitcoin and Gold are two closely related assets that oftentimes, move in opposite directions in the market. There has been a decreasing correlation between BTC and gold which shows that the frequently stated objective of turning Bitcoin into a store of value comparable to digital gold is still far off but this has not affected the adoption rate of the crypto asset in the last few weeks.
Earlier this month, Bitcoin recorded new high price levels right when gold was wallowing in a two month low. Instead of staying true as a haven for investors amidst a global financial crisis, gold saw a decline to the point of breaching the critical support level of $1,880 per ounce.
With the mounting expectation of a spot BTC ETF approval, industry experts like Mike Novogratz, Anthony Scaramucci and Robert Kiyosaki believe that Bitcoin is in for a huge surge. Kiyosaki sees the possibility of BTC hitting $135,000 when the approval finally comes from the SEC.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.