Bitcoin has been called many things over the years. One of its latest titles is “gold killer.”
Case in point, Grayscale Investments earlier this year unveiled an advertising campaign that urged investors to “drop gold, buy Bitcoin,” which centered around showing how the precious metal is rather inefficient and antiquated in today’s modern economy.
While many proponents of the precious metal have laughed at the narrative, calling it foolish and fundamentally illogical, Bloomberg recently backed the narrative.
In a recent report analyzing the cryptocurrency market, Bloomberg Intelligence commodities analyst Mike McGlone remarked that a strong performance in gold should benefit Bitcoin, seemingly hinting that he thinks the two assets are more related than many may think.
Strong Gold Performance to Boost Bitcoin
McGlone remarked in the recent report, published on December 3rd, that Bloomberg’s outlook for Bitcoin is leaning positive, primarily due to increasing adoption and the cryptocurrency’s transition towards the “crypto-market version of gold.”
He elaborated that with his analysis showing that gold is ready to “advance as expected,” Bitcoin could start to show signs of breaching the $10,000 initial resistance at the start of 2020.
New Bitcoin research released by @Bloomberg.
– "just a matter of time before BTC at $10k"
– bitcoin will mimic gold which has an upward bias
– BTC capable of adding 100% upside in 2020
– BTC sitting on good support near $6500 to close out the yearhttps://t.co/ThiNds0YOg pic.twitter.com/qePl31WYnr
— Astronaut Capital (@astronautcap) December 5, 2019
Indeed, gold, alongside Bitcoin, analysts say, is currently being subject to a number of tailwinds on the macro scale. Firstly, China has announced that it will respond to the U.S. after a bill passed supporting Hong Kong’s democracy movement on the Hill.
Secondly, there are growing expectations that there will be a recession, which would crush the stock market, in the coming few years; this should benefit gold and other alternative investments.
And lastly, Ray Dalio, one of the world’s most prominent hedge fund managers, recently wrote that he thinks the “world has gone mad and the system is broken,” noting that the current financial system has many serious underlying flaws.
Halving Also a Bullish Factor
The “Bitcoin is digital gold” narrative isn’t the only reason why the analyst is bullish on the cryptocurrency market heading into 2020. McGlone also wrote that Bitcoin is “winning the adoption race among crypto assets and is become increasingly scarce, which favors price appreciation.
Plenty can go wrong with a nascent asset, but unless the basic premises reverse, there’s a higher probability to sustain price appreciation vs. depreciation.”
Indeed, in around six months’ time, the leading cryptocurrency will see a halving, which is when the number of coins issued per block to miners will get cut in half, effectively meaning that Bitcoin’s inflation rate will be cut in half in layman’s terms.
Prominent industry investor Anthony Pompliano, among many other analysts and investors, is a staunch believer that the halving will push Bitcoin much higher than current prices.
Pompliano, who has become one of Bitcoin’s loudest cheerleaders, posted this tweet below in August, in which he implied that Bitcoin’s halvings will be an event that allows the cryptocurrency to gain more traction than ever before.
Bank of America believes the Federal Reserve may have to resort back to quantitative easing as early as Q4 this year.
Step 1 was cutting interest rates.
Step 2 is printing money.
Step 3 will be the Bitcoin halving.
You can’t write a better script for the rise of Bitcoin ????
— Pomp ???? (@APompliano) August 7, 2019
Others Just as Bullish
Bloomberg’s McGlone is far from the only other well-known analyst claiming that Bitcoin is likely to have a positive trend heading into 2020.
Per previous reports from Blockonomi, Fundstrat Global Advisors’ resident Bitcoin analyst Thomas Lee told CNBC last week that there will be three factors that give BTC a good chance at gains heading into next year:
- The strong growth in U.S. equities, namely the S&P 500, implies that investors will soon start allocating more capital to risk-on investments like Bitcoin and cryptocurrency.
- The halving.
- While China has taken a harsh stance towards Bitcoin thus far, he noted that the authorities in China remain pro-digital assets because they are pro-blockchain.