Mike McGlone, Bloomberg’s chief strategist for commodities, In his latest report on Bitcoin, he remains optimistic about the “first-born” cryptocurrency and indicates the advantage it has over its hedging competitor gold::
“In contrast to the sister currency gold, higher prices are not an incentive for a higher offer.”
Bitcoin supply inflexible?
McGlone alludes to the fact that in most commodity markets, higher demand leads to higher prices, which in turn leads to higher commodity production and price stabilization.. However, the delivery of Bitcoin is controlled with a code. In addition, the production rate of new Bitcoin will be halved next week.
Although it could be argued that while Bitcoin mining cannot be changed by increasing demand, its supply is not inflexible. The amount of the asset that long-term holders take out of the short-term offer corresponds to the price.
A perfect setup like 2017
Also McGlone claims that the combination of Bitcoin’s anti-inflationary supply framework and unprecedented central bank stimulus creates a perfect environment for Bitcoin to outperform other markets.::
“Offer restrictions mean acceptance is the key measure, and most signs remain positive in an unprecedented environment where virtually all central banks aggressively add liquidity.”
According to McGlone Another important metric also indicates the strength of Bitcoin. The 180-day volatility has reached a record lowThe last time the market saw such a significant decline in the asset’s primary risk measure was before the biggest bull run:
“The 180-day record low on Bitcoin is remarkable to signal the bull market that starts in 2015 and ends in 2017.”
Our new best friend ?: Michael Bloomberg and his crypto proposal
McGlone also believes there is evidence of rising buy and hold rates and notes that the Grayscale Bitcoin Trust’s assets under management grow as prices fall:
“It is noteworthy that the recent record for this demand measurement came after the fall in Bitcoin’s price in March when the stock market plummeted. This is an indication of support under Bitcoin that investors have been sensitive to price cuts. Beginning at around 330,000 Bitcoin equivalents May GBTC makes up about 2% of the offer. “