Senior commodity strategist at Bloomberg Intelligence, Mike McGlone, stated October has historically been the best month for Bitcoin (
$109,761.00 ) (BTC) since 2014, averaging gains of about 20% for the month, and that commodities appearing to peak could imply that Bitcoin ( $109,761.00 ) has reached its bottom.
In an Oct. 5 Bloomberg Crypto Outlook report, McGlone says while the rise of interest rates globally is putting downwards pressure on most assets, Bitcoin ( $109,761.00 ) is gaining the upper hand when compared with commodities and tech stocks like Tesla, with the report noting:
“When the ebbing economic tide turns, we see the propensity resuming for Bitcoin ( $109,761.00 ) , Ethereum (
$2,579.43 ) , and the Bloomberg Galaxy Crypto Index to outperform most major assets.”
McGlone notes that Bitcoin ( $109,761.00 ) has its lowest ever volatility against the Bloomberg Commodity Index, which tracks the price movements of global commodities such as gold and crude oil, and suggests that historically Bitcoin ( $109,761.00 ) volatility is more likely to recover as compared to commodities when the crypto heads to new highs.
Bitcoin ( $109,761.00 ) vs BCOM and Bitcoin ( $109,761.00 ) 260 day volatility vs BCOM 260 day volatility. Source: Bloomberg Crypto Outlook
McGlone suggested the second half of 2022 could see Bitcoin ( $109,761.00 ) “shift toward becoming a risk-off asset, like gold and US Treasury’s,” following low volatility throughout September and a potential peak in commodity prices.
In the past, Bitcoin ( $109,761.00 ) has been highly correlated with tech stocks, with its volatility making it a risky asset that traders are likely to sell in an environment where investors are looking to reduce risk.
Related: 5 reasons why Bitcoin ( $109,761.00 ) could be a better long-term investment than gold
Kaiko Research data released on Oct. 4 supports the notion that Bitcoin ( $109,761.00 ) may be transitioning to acting more like “digital gold,” with Bitcoin ( $109,761.00 ) ’s correlation to gold hitting its highest level in more than a year at +0.4 following a strengthening of the United States dollar as interest rates rise.
Bitcoin ( $109,761.00 ) ’s correlation with gold over the last 12 months. Source: Kaiko
A correlation of +1.0 means that the movement between two different assets is synonymous, for example a 10% increase in gold would be matched by a 10% increase in Bitcoin ( $109,761.00 ) should the two assets have a correlation of +1.0.
