In the current cryptocurrency landscape, Mike McGlone, a senior strategist at Bloomberg, has made an interesting observation about the relationship between Bitcoin and gold, and how it could impact the S&P 500. This analysis comes after the SEC’s approval of Bitcoin ETFs, which initially caused Bitcoin to reach new highs in the first quarter of the year. However, despite strong inflows, Bitcoin has failed to surpass its previous highs against gold and the S&P 500 in 2021.
McGlone believes that the launch of the US ETF in January, which saw record inflows, improved Bitcoin’s status as a leading indicator. However, this could have implications for risk assets, as Bitcoin’s performance has not matched that of gold and the S&P 500. While Bitcoin was rising against gold when the S&P 500 e-mini futures broke above its 50-week moving average in November, the Bitcoin/gold cross is now falling.
This drop in the Bitcoin/gold cross, in contrast to the performance of the S&P 500, may indicate a reversal in the trend of investing in risky assets. It is worth noting that this decline comes after Bitcoin’s halving, which historically leads to short-term selling. After the fourth halving, the price of Bitcoin dropped and stabilized around $57,000, the lowest value in the past two months. Since its all-time peak of $73,000 in mid-March, Bitcoin has experienced a correction of nearly 20%.
Despite these fluctuations, Glassnode suggests that Bitcoin’s current uptrend is one of the most resilient in history, with corrections being relatively minor thus far. This reinforces the idea that Bitcoin continues to be a strong investment option.
Please note that the views expressed in this article are for informational purposes only and do not constitute financial or investment advice. Investing in cryptocurrencies carries a risk of financial loss.