Bitcoin could be heading towards the $50,000 mark as Gold loses its appeal with investors
Bloomberg’s senior commodity strategist Mike McGlone believes Bitcoin (BTC) will continue its bullish rise towards $50,000 as more investors move funds from Gold into the cryptocurrency. The leading cryptocurrency touched a new all-time high near $42,000 last month, and the strategist believes it will go higher soon.
McGlone made this prediction in a report published yesterday, where he further predicted that Bitcoin would become a less volatile asset by 2024, probably matching the levels of Gold. According to McGlone, Bitcoin has shown strong support at $30,000, which would provide an avenue for it to push higher.
The strategist wrote, “Bitcoin $30,000—$40,000 cage may refresh bull toward $50,000. Bitcoin started February as a consolidating bull market”. He added that the support base rose towards $30,000 due to an increase in institutional adoption.
Based on the cryptocurrency’s performance in recent months, the potential for BTC to become a global reserve asset is greater than the risk of failure. Hence, the reason why an increasing number of institutional investors are trooping into the Bitcoin market.
The report pointed out that funds are moving from Gold to Bitcoin, with Grayscale Bitcoin Trust (GBTC) gaining more investment while there is a decline in total known ETF holdings of Gold. Previously, Grayscale’s GBTC was worth just 1% of the $210 billion tracking-Gold ETFs. However, the massive influx of institutional funds into GBTC saw it rise to 10% over the past year.
McGlone believes it is logical that more funds are flowing towards Bitcoin and away from precious metals as the world goes digital. The strategist thinks allocating at least 5% of the portfolio to Bitcoin is a wise decision for investors.
He believes that despite Bitcoin’s current price volatility, it has the potential to see its resistance levels rise to 100 times that of Gold. Bitcoin’s resistance is 22 times that of Gold, and the cryptocurrency could become less volatile by 2024. McGlone claims Bitcoin needs to continue its price appreciation and become more mature to match Gold’s risk level.
McGlone isn’t the first to notice the outflow of funds from the Gold market into Bitcoin. JPMorgan strategists previously said Bitcoin’s adoption is coming at the expense of gold. Institutional investors are pulling their funds from Gold exchange-traded funds (ETFs) in recent months and diverting the funds into the Bitcoin market.
CoinShares also published a report in December, revealing that Bitcoin and Ethereum stock traded products were the major recipients of funds from Gold ETFs.