Bitcoin (BTC) and traditional investments, especially stocks, exhibited similar graphic patterns for much of last year. However, these days, this asset that is the pioneer of decentralized finance (DeFi) may seem like a riskier investment compared to the Dow Jones Industrial Average (DJIA).
Will Bitcoin Rise According to Expert Name?
According to Bloomberg’s senior commodity expert Mike McGlone’s statement on August 7th, the risk of Bitcoin is currently higher than the stock index of the 30 leading companies listed on the US stock exchanges, compared to the time they first matched in the first quarter of 2021.
According to McGlone, when Bitcoin crossed $30,000 in January 2021, surpassing the Dow, and considering that this level has served as a pivot since then, there may be “downside effects”. He also emphasized the difference in volatility between the two time periods:
The graph that is currently showing resistance shows that annual Bitcoin volatility is about 3 times that of the stock index; it was just below 2 times in the first quarter of 2021. Unless adding an asset with high volatility to a portfolio increases total return through diversification, there is usually little incentive to add that asset.
The commodity expert finally highlighted that the 100-week Bitcoin-Dow correlation is close to its historically highest level at about 0.3″ and due to this relationship, the stock market may experience a normal downturn due to recession and put pressure on Bitcoin.
Bitcoin Price Analysis
Currently, Bitcoin is trading at $28,984, which indicates a 0.08% decrease in the last 24 hours, a 1.38% decrease in the previous seven days, and a 4.04% loss on the monthly chart according to the latest information.
All things considered, stagnation can be a challenging period for Bitcoin. Especially considering the fact that the leading cryptocurrency should outperform most risky assets. However, despite the previous prediction that the price will return to $69,000 reported in April, the situation may not be definitive, as explained in detail by McGlone last week.
