The leading cryptocurrency in terms of capitalization is preparing to break away from the precious metal hundreds of times, according to Bloomberg analysts.
Bloomberg analysts have found that the volatility of bitcoin can increase the gap between the price of cryptocurrency and gold by hundreds of times. This was reported in Bloomberg’s monthly cryptocurrency report.
Such a scenario is possible if the volatility of the cryptocurrency moves within the framework of the formed model.
Analysts noted that Bitcoin’s 260-day volatility against gold has hit a low. She was last at this level in early 2017. The chart shows the volatility as well as the value of bitcoin in relation to gold.
“… if past volatility patterns repeat themselves, a 100-fold increase in bitcoin’s value relative to gold could be the next key threshold,” Bloomberg said.
It is worth noting that hitting a 260-day low in early 2017 triggered Bitcoin’s annual rally.
Bitcoin at the beginning of the road
Such an impressive gap between bitcoin and gold would mean the growth of the cryptocurrency to the level of ~ $ 184 thousand (at a gold price of $ 1842 per ounce). However, Bloomberg did not name the time frame for reaching new highs. As a medium term, Bitcoin needs to at least gain a foothold on the first target of $ 50,000, analysts say.
“Bitcoin started February with a bullish consolidation. The support grew to $ 30 thousand due to the increase in institutional implementation … “, – write the analysts.
The instability of many altcoins, which, to a large extent, develop due to speculation, can play into the hands of bitcoin, Bloomberg believes. The collapse of such digital currencies can strengthen the position of the main cryptocurrency in the status of “reserve currency”.
The great transfer of wealth
Analysts say the leading cryptocurrency is currently being driven by the idea of ​​digital gold. At the same time, according to Bloomberg experts, there is ample evidence that institutional money is being actively withdrawn from the gold market in favor of Bitcoin.
Pink line – ETF savings in gold. White – Grayscale Bitcoin Trust. Source: bloomberg.com
The graph above shows how Grayscale’s Bitcoin Trust (GBTC) is actively increasing its reserves. At the same time, stocks of assets in exchange-traded funds (ETFs) in gold are shrinking.
However, this is not the first time that Bloomberg has named large numbers for the future price of bitcoin. In November 2020, Bloomberg analyst Mike McGlone said that bitcoin could “add zero” to the base of its rate in the future.
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