In a new bitcoin report published on May 5, McGlone said that sustaining above this level is necessary to indicate strength.

“Bitcoin is showing divergent strength versus the wobbly stock market,” he said, noting the cryptocurrency’s rapid decline on March 12, when it plunged 27%.

BTC rose past $8,000 for the first time in several weeks at the end of April, largely spurred by the impending halving. At Press time, the coin was up 4.2% at $9,216 over the last 24 hours, according to data from markets.bitcoin.com.

The Bloomberg Galaxy Crypto Index (BGCI) shows bitcoin “recovering above its upward-sloping 52-week moving average, while the same measure of the S&P 500 is turning downward.”

Like gold, McGlone opines, the trend indicates that:

BTC is rapidly transitioning away from a risk asset and gaining credence versus stocks. Relative volatility and momentum measures indicate a firming price foundation for the crypto.

Similar to about 3,000 on the benchmark stock index, $8,000 has been a key pivot point for much of the past year in the cryptocurrency industry, as per the report. The ratio of BTC’s 180-day volatility against the same gauge on the S&P 500 dropped to a measure of 2 this year, a new low.

“The drop to new lows in the relative-volatility ratio indicates a firming bitcoin price foundation versus the stock market,” said McGlone.

The commodity strategist also spoke about how diminishing supply, increasing demand and a favorable macroeconomic situation (overrun by stimulus packages) support a positive BTC price outlook, perhaps even better than gold.

“In May, the daily production of new coins will drop by half, and unlike quasi-currency brethren gold, higher prices won’t be an incentive for more supply,” McGlone elaborated.

He added: “Restricted supply means adoption is the metric that matters, and most indications remain positive in an unprecedented environment where virtually every central bank is aggressively adding liquidity.”

Source: https://news.bitcoin.com/bitcoin-pulls-away-from-stock-market-as-price-staying-above-8000-signals-strength-bloomberg-analyst/

The post Bitcoin Pulls Away From Stock Market as Price Staying Above $8,000 Signals Strength – Bloomberg Analyst appeared first on Bitcoin Singapore.

With its correlation to gold jumping to all-time highs, BTC is poised to transition from a risk-on speculative asset to the crypto market’s version of the metal.

“This year marks a key test for bitcoin’s transition toward a quasi-currency like gold, and we expect it to pass,” the report says. The damage to world economies caused by Covid-19 is prompting governments to dole billions of dollars in stimulus. Bloomberg expects bitcoin to gain amid the circumstances, helped on by mainstream adoption.

Per the report, despite BTC’s annualized volatility that’s averaged about 5x that of the S&P 500 in the past year, the crypto is down 5% in 2020 against 22% for the stock index as at April 2. Bloomberg said:

For more-established assets, this would be considered a sign of divergent strength. For the nascent crypto, it’s also an indication of a transition toward gold-like adoption, maturity and performance.

As digital gold, BTC appeals to the cashless internet economy largely on account of its characteristics that include round-the-clock price transparency, and the lack of limits, interruptions or third-party oversight, notes Bloomberg.

The report shows BTC’s decline this year holding above its 2018 low “which was about an 80% drawdown from the peak.” The stage for a strong comeback is set. It states: “On sounder footing after its previous shakeout, bitcoin is gaining relative fuel as stocks reset, if history is a guide.”

While Covid-19 will witness the enduring decline of cryptocurrencies, BTC, is considered a hedge asset, that will appreciate. “The macroeconomic effects of the coronavirus accelerate bitcoin’s process of gaining value relative to other cryptos.” In the year to April 2, BTC outperformed the Bloomberg Galaxy Crypto Index, surging 40% versus 13% decline in the index.

The Bitcoin futures tamed the BTC bull market, a development Bloomberg interprets in terms of the maturation of the cryptocurrency. “Increasing futures open interest, declining volatility, and relative outperformance despite the stock-market shakeout indicates bitcoin is maturing from a speculative crypto asset toward a digital version of gold,” it added.

Source: https://news.bitcoin.com/bitcoin-to-be-digital-gold-in-2020-says-bloomberg-report/

The post Bitcoin to Be Digital Gold in 2020, Says Bloomberg Report appeared first on Bitcoin Singapore.