Bloomberg Strategist Explains Key Macro Drivers for Prices of Gold and Bitcoin

On Thursday (October 22), Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence (BI), Bloomberg’s research arm on the Bloomberg Terminal, gave an interview, during which he explained why he expects the BTC price to reach $100K by 2025 and why gold is still worth buying despite Bitcoin’s greater upside potential.

McGlone’s comments about gold and Bitcoin during an interview with David Lin, Associate Producer for Kitco News.

McGlone started by talking about why he believes the Bitcoin price to reach $100,000 by 2025:

“The key thing about Bitcoin is I don’t see what’s going to stop it from doing what it has been doing for most of its life — and that’s appreciating. The key thing it has been doing since it went to $100 and then $1000 and then $10,000, which is really been the consolidation price for the last three years, is it just has a history of adding zeros, and so if you add some maturity to that, which we should be because volatility is declining — it’s becoming more adopted — to get to the next zero, i.e. from $10,000… it should take probably… take eight years, but then I factor in all the other factors…”

As for Bitcoin’s correlation with gold, McGlone says that he expects this to continue:

“Yes, I think it’s enduring as Bitcoin becomes a more mature digital version of gold.

“Just look at the 12-month correlations… around 0.77, 52-week is around 0.5. The key fact is [that] it’s the highest ever. Now, Bitcoin is following gold, and gold’s made new highs, but it’s macroeconomic environment is, I think, quite significant, i.e. unprecedented debt to GDP [ratio], quantitative easing, negative rates… that makes things like gold and Bitcoin look attractive.

“Then you look at the correlation to stock market. A lot of people point that out, but I think it’s much more spurious, i.e. Bitcoin’s been around for 10 years… in the last ten years, it’s just been a very significant rallying stock market.. so, at some point when we see some normalization in that stock market appreciation, maybe a bear market, maybe just a period of unperformance, that’s when I think we’re gonna see a lot of flows tipping more towards things like gold and Bitcoin for performance.”




McGlone also said that although it is true that as Bitcoin matures it is going to trade more and more like a store of a value rather a risk asset and that the same macro factors are going to push higher the prices of both gold and Bitcoin during the next five years, it is still worth investing in gold even though it has less upside potential than Bitcoin:

“New versus old and risks. I mean, we all know Bitcoin’s the new technology. It could fail. I don’t know; I can’t predict what’s going to really happen with the technology. And regulation — it could be banned, it could be regulated away.

“Gold’s already been passed that. You know, it was banned in this country in the 30s, and now it’s come back…

“I think people are becoming to figure out that as long as there’s demand and adoption for this digital store of value, it’s price has to go higher because supply is going down.”

Finally, as the Bloomberg strategist explained in a tweet last Wednesday, he feels that the Bitcoin price has a decent chance of going as high as $14,000 by the end of the year:

Featured Image by “WorldSpectrum” via Pixabay.com

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.


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