Bitcoin is eating away at gold’s market share, says commodity strategist Mike McGlone
Mike McGlone believes that BTC could be primed for a rally this year after the crypto market’s massive correction.
Wed, 22 Sep 2021, 08:36 am UTC
Mike McGlone, a commodity strategist at Bloomberg Intelligence, said that Bitcoin is slowly eating away gold’s market share. He added that BTC could be primed for a rally this year after the crypto market’s massive correction.
McGlone also said that the increasing popularity of Bitcoin has affected the gold market. He explained that some investors have traded a portion of their allocation for gold in exchange for BTC to diversify their portfolios. “You can see the amount of ETFs and demand for Bitcoin every day has increased and I see outflows in gold,” he said in an interview with Stansberry Investor host Daniela Cambone on Sept. 21,
The reason for this is that it’s just prudent to diversify one’s portfolio. Instead of having just gold as an inflationary hedge, some investors are also allocating a small portion into Bitcoin.
“Let’s look at it this way. From a prudent money management investment standpoint of view, any type of money, if you have any type of money in gold and you’re not allocating into Bitcoin - just a small portion, you’re at a greater risk of looking like you’re being left out or falling behind,” he explained.
He explained that investors who insist gold is a better inflationary edge and refuse to allocate a small portion of their portfolios in cryptos are being left behind. “I fear that people who keep pointing out how gold has been the hedge forever - I agree with you – and I leave you with this. Before the automobile, the horse was the best form of transportation,” he said. “Every day that Bitcoin doesn’t fail, it’s moving into gold’s space. And this year is a good example of that.”
McGlone said that a correction in the stock market might not necessarily drag the crypto market down with it. “What’s happening lately is we’re seeing this wobble in the stock market but Bitcoin continues to show divergence,” he said. “I expect that to continue.”
The strategist pointed out that Bitcoin could rally to $100,000 this year after that massive correction which saw the crypto briefly trading below $30,000. “I think we’ve already had a significant correction this year,” he explained. “One of the best ways to create the foundation of the market is to flush out the speculative excesses. Crypto has a great foundation. It’s corrected… and now it’s starting to recover.”
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