Considering the eternal rivalry between Bitcoin and Gold, Bloomberg’s senior intelligence strategist Mike McGlone provided insights on how the trend between the two assets might unfold in 2024.
While the growth potential for Bitcoin in the coming year is high, the Bloomberg Strategist does not overlook the potential for Gold to exhibit some compelling performances. According to McGlone, if the US eventually enters a recession as predicted, gold could gain an advantage over Bitcoin. This is because the Bitcoin-gold cross rate appears to be supported by a rising stock market. This trend’s influence on Bitcoin, which is often perceived as a risk-laden token by the stock market, could be inevitable.
Although Bitcoin generally shows correlation with certain stock market indices, this correlation has diverged in the past few months, with the newly emerging asset class gaining impressive price traction. A recession could position Gold advantageously against Bitcoin, but McGlone suggests that if the S&P 500 does not fall when the recession begins, it could help Bitcoin to continue to outperform Gold in the medium term.
With the inflation rate in the United States reportedly at a relatively lower level, the Federal Reserve has kept interest rates steady. This could signal investors that a significant turning point may be on the horizon. Should the Fed implement a rate cut soon, it could automatically strengthen Bitcoin as an influx of cash into the economy, weaken the dollar, and significantly empower Bitcoin.
Regardless of the economic path in 2024, there is a possibility that Bitcoin could keep pace with its impressive performance since the beginning of the year, which has seen growth of more than 151%. Regardless of the recession outlook for the next year, the potential approval of a Bitcoin Exchange Traded Fund (ETF) product by the United States Securities and Exchange Commission (SEC) could change the prospects of the cryptocurrency performing at its best. According to Bloomberg analysts, the probability of this product being approved is currently pegged at 90%, and the approval window is set for early January. While investors and market participants await feedback from the SEC, Bitcoin continues to maintain its lead as the superior asset in terms of growth rate, ahead of gold.
