Bitcoin (BTC) could be approaching an important turning point, and the outcome could have implications beyond the crypto market. According to Bloomberg Intelligence's senior commodity strateg
Bitcoin (BTC) could be approaching an important turning point, and the outcome could have implications beyond the crypto market.
According to Bloomberg Intelligence's senior commodity strategist Mike McGlone, the Bitcoin-gold ratio was hovering around 20 ounces of gold per Bitcoin on Oct. 31. He believes there is a risk of the ratio falling towards 15 than climbing towards 25.
The trajectory has implications for risk assets, he warned.
Price analysis shared by McGlone on Oct. 31
While investors have accumulated gold for centuries, Bitcoin is a relatively new asset, but its proponents call it "digital gold" because its supply is also limited like the bullion.
When Bitcoin's ratio against gold rises, it means Bitcoin is gaining strength. But when it falls, gold is outperforming Bitcoin.
A drop in the Bitcoin-gold ratio from 20 to 15 would suggest investors are finding gold more attractive than BTC, McGlone suggested. But his concern goes far beyond Bitcoin's price.
Bitcoin gained strength against gold in 2021 on the back of a major monetary stimulus, McGlone underlined. As interest rates remained low and investors rushed into riskier assets, Bitcoin emerged as one of the biggest beneficiaries.
But since then, the cryptocurrency's 260-day volatility has averaged roughly three times that of gold over the past five years, he added. Bitcoin has failed to deliver consistently stronger performance than gold despite the former experiencing more volatile price swings, he underlined.
McGlone didn't stop there.He analyzed its impact on the stock market.
He highlighted the historical relationship between the Bitcoin-gold ratio and the Nasdaq-100, he suggested that weakness in Bitcoin relative to gold could signal fading investor appetite for risk, potentially creating pressure on tech stocks.
If the Bitcoin-gold ratio can't hold above 20, it reinforces the notion that gold is becoming the preferred safe haven among investors willing to bet on risk assets.
Ahead of the U.S. midterm election on Nov. 3, McGlone warned against any market optimism regarding a post-poll rally. Instead, he thinks a correction ahead is more likely.
If the U.S. stock market slips this week, it could add fuel to the 2026 "pump-then-dump" patterns in Bitcoin, gold, silver, platinum, palladium, iron ore, nickel, lead, and U.S. natural gas, the analyst warned.
BTC/USD, Source: DecibelBitcoin was trading at $77,237 at the time of writing as per Decibel. Gold was trading at $3,947.22 an ounce.
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